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May 23, 2022
U.S. Treasury Set to Push Russia Closer to Default
Journalist Daniel Flatley
The US Treasury Department is expected to tighten sanctions this week on Russia, threatening about $1 billion owed to bondholders for the rest of this year and putting the country once again on the edge of default.
Treasury Secretary Janet Yellen said last week she’s unlikely to extend an exemption expiring on Wednesday that allows Russia to make payments on its foreign-currency bonds to US investors. That decision will close all loopholes allowing any such transactions, according to a person familiar with the matter.
Yellen’s comments on the exemption were partly intended as a red flag to investors who might consider Russia’s distressed assets a buying opportunity if the license is extended, according to Rachel Ziemba, an adjunct senior fellow at the Center for a New American Security.
“They’re pushing back against the Russian narrative that all is well in Russian financial markets,” Ziemba said. The comments are “designed to remind investors about the significant financial risks for Russian assets.”
Read the full story and more from Bloomberg.