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Russia could face historic default after U.S. bars it from accessing American banks

Treasury Building
Posted at 12:15 PM, Apr 06, 2022

The Treasury Department will not allow any Russian government debt payments from accounts at U.S. financial institutions to be made in U.S. dollars, an agency official says.

That restricts one of the strategies President Vladimir Putin is employing to stave off default.

Russia faces several April deadlines to make debt payments.

If it does not make those payments, Russia will face a historic default.

The country holds more than $600 million in reserves held in American banks.

The Kremlin must now choose between draining remaining valuable dollar reserves, new revenue coming in or possible default.

Treasury had previously said sanctions levied on Russia over its invasion of Ukraine still permit Russia to continue to make debt payments.

The debt is owed to foreign investors, among others, and comes from government investments to presumably spur economic growth in Russia.