The US Treasury announced on Tuesday (05.24.2022) that the United States will end the waiver allowing Moscow to pay its foreign liabilities in dollars starting at 04:01 GMT Wednesday.
The end of this waiver comes two days before Russia’s next debt-servicing payment, which amounts to about $100 million in interest on its obligations, is due, leaving Moscow vulnerable to eventual default.
This exemption has been in effect since the inception of Western sanctions against Russia in response to the invasion of Ukraine that began on February 24, and this exemption has allowed Moscow to escape default so far.
Washington had decided on the measure to allow “an orderly transition and for investors to sell their titles,” as US Treasury Secretary Janet Yellen explained last week, who also noted the “potential” suppression of the measure.
For its part, Russia is no longer able to repay the dollar debts in US banks, within the framework of the tightened sanctions imposed by the United States on April 5.
Russian Central Bank Governor Elvira Nabiullina admitted on April 29 that Moscow was facing “repayment difficulties” but declined to talk about the possibility of her country defaulting.
Russia’s external debt, according to the Ministry of Finance, is from 4,500,000 to 4,700,000 rubles (78,000 to 81,000 million dollars at the current rate), that is, 20% of its total public debt.
gs (afp, ap, Reuters)
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