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Default will have little impact on Russia – US Treasury – RT Business News

Janet Yellen confirmed Washington would likely block bond payments from Moscow

US Treasury Secretary Janet Yellen confirmed on Wednesday that Washington was unlikely to extend an exemption allowing Russia to make bond payments on its sovereign debt.

It was expected to be time limitedYellen said at a press conference in Bonn, Germany. She was referring to the waiver which is due to expire on May 25. It was issued shortly after the United States introduced sanctions against Moscow following the launch of a military operation in Ukraine in February, and allowed Russia to repay its public debt to American investors. .

Yellen noted that no final decision has been made so far, but said the government would likely let the waiver expire. If so, Russia will not pay its bond coupons, even though Moscow has repeatedly said it has sufficient funds to do so. Non-payment would constitute a technical defect, which Russia is trying to avoid.

However, the US Treasury chief also said that if Russia declares a technical default, it would not significantly change the situation in the country, although she did not elaborate on the subject.

Yellen said the US Treasury Department is still analyzing the potential consequences of the decision.

We want to make sure we understand what the consequences and potential fallout of license expiration would be,” she says.

Yellen’s comments came a day after Bloomberg reported that the Treasury Department’s Office of Foreign Assets Control was to let the temporary exemption expire, citing unnamed sources.

So far, Russia has managed to make all its payments to foreign creditors. His next debt payment is due May 27. Overall, the country faces more than $490 million in foreign currency obligation payments by the end of June.

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