Global Sanctions Push Russia Closer to Debt Default
Headline Roundup May 26th, 2022
The U.S. Treasury Department has announced that it is not renewing the license that allowed Russia to pay debt holders through American banks.
This move, which will make it harder for Russia to pay its international debts, could push the country closer to default, as Russia is due to owe creditors roughly $2 billion by the end of the year. Russia has indicated that it plans to contest any declaration of default, and suggests it has the funds to pay since it is rich in oil and gas supplies. However, Russia's debt was already downgraded in March to "junk status" by major ratings agencies, which makes it difficult for Russia to obtain funds in international markets. A default by Russia would mean the first time since 1998 that the country has failed to pay its debt.
European Commission President Ursula von der Leyen said that the sanctions on Russia are crippling Vladimir Putin's "war machine" as fighting continues in eastern Ukraine. She also said the sanctions are "draining" the Russian economy. Wall Street Journal (Center bias) and others across the spectrum are also highlighting how the ruble is soaring despite Russia's various other economic crises resulting from global sanctions. See our Ukraine war page for the latest on the Russia-Ukraine conflict.
European Commission President Ursula von der Leyen said Tuesday that the unprecedented sanctions imposed on Russia over its war with Ukraine are "draining" the Russian economy and Russian leader Vladimir Putin's "war machine."
"Ukraine must win this war," von der Leyen said during an address at the World Economic Forum's annual gathering in Davos, Switzerland.
"And Putin's aggression must be a strategic failure," she added. "We will do everything we can to help Ukrainians prevail and retake the future into their hands."
Von der Leyen noted that the sweeping economic sanctions against Russia by...
The US is cutting off another financial route for Russia to pay its international debts, a move that could push the country closer to default.
The US Treasury Department said it would end a waiver that had allowed US bondholders to accept payments, tightening sanctions imposed over the war in Ukraine.
Russia, which is rich from its oil and gas supplies, has the funds to pay.
It has already signalled plans to contest any declaration of default.
The country has almost $2 billion worth of payments that will be due...
Moscow is edging closer to defaulting on its national debt for the first time since the Bolshevik coup more than a century ago after the US cut off its ability to pay creditors today.
The Treasury Department said in a notification that it does not plan to renew the license that allowed Russia to keep paying its debtholders through American banks, making a Russian default all but inevitable.
Since the first rounds of sanctions, the Treasury Department has given banks a license to process any dollar-denominated bond payments from Russia. That...