The United States will likely end an exemption allowing Moscow to pay its foreign debts with dollars held in Russia, the US treasury secretary said Wednesday, a move that could push Vladimir Putin’s country into default. “When we first imposed sanctions on Russia, we created an exemption that would allow a period of time for an orderly transition to take place and for investors to be able to sell securities,” said Janet Yellen. “And the expectation was that it was time limited. So I think it’s reasonably likely that the licence will be allowed to expire.” Punishing sanctions imposed following Russia’s invasion of Ukraine in late February have largely severed the country from the international financial system, blocking Moscow’s ability to access dollars held in US banks to pay its debts. The Russian government has attempted to pay in domestic currency, but many of the bonds do not allow repayment in rubles. As a result, Putin’s government has had to turn to US dollars held in Russia to meet those payments — an escape clause from default that is due to expire on May 25.
US ‘likely’ to scrap Russia debt payment exemption: Yellen
Published on: May 19, 2022 12:38 AM