The US Treasury Secretary believes that the sanctions weighing on Russia have enabled it to pay its debt in dollars for a certain time.
The United States will notmost likely“not extend the exemption from Western sanctions that allowed Russia to temporarily continue to pay its debt in dollars, and thus escape default, warned on Wednesday the US Treasury Secretary Janet Yellen.
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“When we first imposed sanctions on Russia, we created an exemption (…) and it was expected to be time-limited“, she justified at a press conference preceding a meeting of G7 finance ministers in Germany. “So I think it’s likely that the license will be allowed to expire“, added Janet Yellen, affirming however that it “no final decision yet” on the subject.
An exemption decided by Washington
This exemption expires, according to the sanctions rules, on May 25. In place since the start of Western sanctions against Russia, in retaliation for the war in Ukraine, this exemption allows Moscow to repay its debt in dollars held in Russia. It had been decided by Washington to “allow an orderly transition to take place and investors to sell their securities“, explained Janet Yellen.
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On the other hand, Russia can no longer repay its debt with dollars held in American banks, within the framework of the reinforced sanctions imposed by the United States on April 5. The May 25 deadline comes two days before the next payment deadline for Moscow, which is for 100 million euros in interest on two bonds, one of which explicitly cannot be paid in rubles. The country could therefore face a risk of default.
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