The U.S. prohibits Russia from paying bondholders through U.S. banks, increasing default risk

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Kremlin Tower and Ivan Cathedral in Moscow.

Cyrillic Kudryavtsev | Afp | Getty Images

The Biden administration will ban the Russian government from paying bondholders through US banks from Wednesday morning. Treasury said..

This move increases the likelihood that Russia will default on unpaid debt.

This is the latest sanctions on the country by the United States in response to Russia’s invasion of Ukraine.

Since the invasion, the Biden administration has made significant exceptions to sanctions against the Central Bank of Russia, allowing it to process payments to bondholders through US and international banks.

But the exception goes away on Wednesday at 12:01 am. “Notice Concerning Russia’s Harmful Foreign Activity Sanctions General License 9C.”

According to a Dow Jones report, JPMorgan Chase and Company’s research shows that Lussa will pay nearly $ 400 million in dollar-denominated bonds on June 23 and 24.

Timothy Ash, Senior Sovereign Strategist at BlueBay Asset Management, Notify CNBC earlier this month The Office of Foreign Assets Control, which manages economic and trade sanctions, said Russia “can act at any time to prevent bond repayments from Western institutions.”

“OFAC can always drive Russia to default. OFAC is still in control,” Ash said.

The U.S. prohibits Russia from paying bondholders through U.S. banks, increasing default risk

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The post The U.S. prohibits Russia from paying bondholders through U.S. banks, increasing default risk appeared first on Eminetra.

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