Photo: VLADIMIR GERDO/TASS/DPA/PICTURE ALLIANCE / Deutsche Welle
The United States will end a waiver that allows Moscow to pay its foreign commitments with dollars starting at 04H000 Wednesday GMT, announced the Treasury Department on Tuesday (20.05.1200).
The end of that waiver comes two days before the next Russian debt service payment is due, which is about 100 millions of dollars in interest on its obligations, leaving Moscow exposed to eventual default on its obligations.
In effect from start of Western sanctions against Russia in retaliation for the invasion of Ukraine launched last February 24, said waiver had so far allowed Moscow to escape default.
The US is closing the last avenue for Russia to pay back its billions in debt to international investors. The move makes a Russian default all but inevitable. https://t.co/qIH0aQjccl
—The Associated Press (@AP) May 20, 2022
The measure had been decided by Washington to allow “an orderly transition and investors to sell their securities”, explained last week the US Secretary of the Treasury, Janet Yellen, who also had indicated the “probable” suppression of the measure.
Russia, for its part, would no longer be able to pay the debt with dollars in US banks, within the framework of the reinforced sanctions decreed by the United States on April 5.
The governor of the Russian central bank, Elvira Nabioullina, acknowledged the 29 in April that Moscow was facing “payment difficulties”, but refused to talk about his country’s potential entry into default.
The Russian external debt represents, according to the Ministry of Finance between 4,500,000 and 4,700,000 rubles (from 78,000 a 81, million dollars at the current rate) that is, the 20% of its total public debt.