Sylvie Claire / May 25, 2022
The United States has decided to end, as of 00:01 Wednesday Washington time, an exemption allowing Moscow to pay its debts in dollars, announced Tuesday the U.S. Treasury, a decision that could precipitate the country into default.
This announcement comes two days before the next payment deadline for Moscow, which is for just over $100 million in interest on two bonds, one of which explicitly cannot be paid in rubles.
In place since the beginning of Western sanctions against Russia, in retaliation for the war in Ukraine, this exemption had allowed Moscow to escape default.
It was decided by Washington to allow for an orderly transition and for investors to sell their securities, explained U.S. Treasury Secretary Janet Yellen last week.
Russia could no longer pay its debts with dollars held in U.S. banks, as part of the tightened sanctions imposed by the United States on April 5.
The governor of the Russian central bank, Elvira Nabioullina, acknowledged on April 29 that Moscow was facing payment difficulties but refused to talk about potential default.
According to the Russian Ministry of Finance, Russia’s foreign debt amounts to about 4.5 to 4.7 trillion rubles (about $78 to $81 billion at the current rate), or 20% of the total public debt.