This is the financial bomb I think we’ve been waiting for:
The United States stopped the Russian government on Monday from paying holders of its sovereign debt more than $600 million from reserves held at American banks, in a move meant to ratchet up pressure on Moscow and eat into its holdings of US dollars.
Under sanctions put in place after Russia invaded Ukraine on Feb. 24, foreign currency reserves held by the Russian central bank at US financial institutions were frozen.
But the Treasury Department had been allowing the Russian government to use those funds to make coupon payments on dollar-denominated sovereign debt on a case-by-case basis.
On Monday, as the largest of the payments came due, including a $552.4 million principal payment on a maturing bond, the US government decided to cut off Moscow’s access to the frozen funds, according to a US Treasury spokesperson.
So in plain English that those of us who dread balancing our checking accounts can understand, “Russia must choose between draining remaining valuable dollar reserves or new revenue coming in, or default.”
If Russia fails to make any of its upcoming bond payments within their pre-defined timeframes, or pays in rubles where dollars, euros or another currency is specified, it will constitute a default.
I don’t know why it took so long.
Well yesterday they did a “Checkmate Libtards!” move of allegedly pegging the ruble to gold (at a vastly inflated value, naturally).
However this does mean that their debtors can request payment in gold instead of paper. Don’t think pooty has that much in their coffers.
Also, too…when Russia discovers that deflation is vastly worse than inflation, even of the Zimbabwean scale.
LikeLiked by 1 person