Al Mayadeen English

  • Ar
  • Es
  • x
Al Mayadeen English

Slogan

  • News
    • Politics
    • Economy
    • Sports
    • Arts&Culture
    • Health
    • Miscellaneous
    • Technology
    • Environment
  • Articles
    • Opinion
    • Analysis
    • Blog
    • Features
  • Videos
    • NewsFeed
    • Video Features
    • Explainers
    • TV
    • Digital Series
  • Infographs
  • In Pictures
  • • LIVE
News
  • Politics
  • Economy
  • Sports
  • Arts&Culture
  • Health
  • Miscellaneous
  • Technology
  • Environment
Articles
  • Opinion
  • Analysis
  • Blog
  • Features
Videos
  • NewsFeed
  • Video Features
  • Explainers
  • TV
  • Digital Series
Infographs
In Pictures
  • Africa
  • Asia
  • Asia-Pacific
  • Europe
  • Latin America
  • MENA
  • Palestine
  • US & Canada
BREAKING
Al Mayadeen's correspondent: The Lebanese Army is continuing its investigations and will later announce any information that does not affect the confidentiality of the investigation
Al Mayadeen's correspondent: It has not yet been determined whether the detainees belong to ISIS or another organization
Al Mayadeen's correspondent: Around 10 people of different nationalities, including Lebanese nationals, were detained
Al Mayadeen's correspondent: The Lebanese army arrested a number of people in the Matn area of Mount Lebanon with possession it has not disclosed
Gaza Civil Defense spokesman: We have strong indications that there are martyrs, injuries, and trapped people in the Salah al-Din area
Gaza Civil Defense spokesman: Citizens should avoid Salah al-Din Street because anyone who approaches it is at risk of being directly targeted
Gaza Civil Defense spokesman: Reality is that there is a very limited retreat of the vehicles, with the occupation forces providing cover undeer fire up to Salah al-Din Street
Gaza Civil Defense spokesman: Claims that the Israeli occupation has withdrawn from areas in the neighborhoods of al-Zaytoun, al-Tuffah, and al-Shujaiya are false
Hamas: The two delegations stressed that any negotiations must lead to the achievement of our people's goals and aspirations, foremost among which is ending the war and the complete withdrawal of enemy forces
Hamas: A delegation from the Hamas leadership, led by the head of the leadership council, Mohammad Darwish, met with an Islamic Jihad delegation, headed by its Secretary-General, Ziyad al-Nakhalah

US Treasury tries pushing Moscow to "technical default"

  • By Al Mayadeen English
  • Source: Agencies
  • 25 May 2022 12:39
  • 1 Shares
5 Min Read

The retaliatory move has been expected for a while now.

  • x
  • rus
    The United States, in retaliation against a strengthening ruble, seeks to set Moscow on a default. 

A notice posted on the Department of Treasury website says that Russia's general license waiver which allows Moscow to pay US debt will not be extended. The waiver is set to expire at 12:01 on Wednesday. 

This decision comes just a day after Moscow announces that it will be loosening its capital control measures against its ruble, which has been on an upward movement, becoming too "strong" a currency. The rationale is that the ruble, which has been at its all-time high in 4 years, is threatening to reduce export profit. The Finance Ministry said it will be cutting the share of foreign currency earnings from 80% to 50%

This move by Washington was expected, and it is said that it will set Russia into technical default of its debt obligations. Several US outlets anticipated and reported on this decision, but it was not confirmed by the Treasury Secretary Janet Yellen.

Although Washington had blocked Russian accounts due to the conflict in Ukraine, it issued a debt waiver because Wally Adeyemo, the Deputy Treasury Secretary, argued that such payments would divert funds from the military. According to Adeyemo, Russia paying debt was a "sign of success" for the sanctions policy of the US. 

Nevertheless, Moscow anticipated the move; the Russian finance minister last Friday said it had made early payments for a total of $99.25 million on two Eurobonds which were due on May 26, leaving Moscow with $2 billion worth of external bond payments due before the end of 2022.

As of April 1, Russia had a little over $57.1 billion of external public debt. The world's most prominent energy provider is not short on money to pay it, with doubling oil and gas revenues since the start of the war in Ukraine. The revenues from energy, alone, amount to $28 billion, according to Reuters.

The aim of removing the waiver is to damage Russia's reputation in international financial markets as it seeks to set the country into a "technical default."

“Russia is capable of repaying any of its obligations in any currency, as long as no artificial problems are created,” so the US obstacles “will not affect the real financial reputation of our country in any way,” former Russian President and current Security Council Deputy Chair Dmitry Medvedev said last week.

Related News

What is Netanyahu smoking? Araghchi slams Israeli influence over US

Pentagon official assessment shifted US focus from Ukraine to China

“Everyone understands that this is a political default, not a financial one," said Medvedev, adding that if the US were to generate obstacles in the face of Russian payment, then Russian courts should consider them either the fault of the creditor or force majeure. The Russian Finance Ministry adopted this position, offering an ultimatum: If the US does not extend the waiver, investors should seek judicial remedy from states that “illegally create obstacles to making payments.”

Medvedev also noted that Russia was willing to pay its foreign debt in rubles. However, Moscow might choose “not to pay at all and use the unspent money for precisely those purposes that those senile Americans will not like very much.”

Anton Siluanov, the Russian Minister of Finance, has said in court that Russia can prove in court that it had done everything possible to pay the debt. As soon as Western governments unblock frozen Russian accounts, investors that hold Russian bonds can take payments in rubles and convert them to other currencies.

On April 18, Adeyemo announced that Washington wants to dismantle Russia's "war machine" by disrupting its defense industry and supply chain, in other words, taking apart the Russian economy.  

Within the same month, US President Joe Biden said in response to the war in Ukraine, the United States and its allies will continue to ratchet up economic costs on the country and further isolate it.

An artificial default 

In March, Russian Finance Minister Anton Siluanov denied that Russia would be unable to make the payments.

He stated that Russia was willing to service the loan in rubles at the rate set by Russia's central bank on the day of payment. He also accused the West of coercing Russia into an "artificial default".

If Russia fails to make the bond payment, an automatic 30-day grace period kicks in, and after that, it is regarded as default on its foreign currency-held debt.

In parallel, JPMorgan analysts contended that US sanctions should not immediately limit Russia's ability to fulfill its debt.

Read more: How sanctioning Russia may be futile: The Hill

 

Interest payments to American entities on bonds issued by Russia's Central Bank, Finance Ministry, or National Wealth Fund before March 1 are "permissible through May 25." Afterwards, they would need the authorization to continue receiving these payments, according to the US Treasury.

  • US Treasury Department
  • US Treasury
  • Department of Treasury
  • United States
  • Dmitry Medvedev
  • Russia
  • Ukraine
Russia & NATO

Russia & NATO

As the Draconian Western-led sanctions on Russia exacerbate the economic crisis worldwide, and as Russian troops gain more ground despite the influx of military aid into Ukraine, exposing US direct involvement in bio-labs spread across Eastern Europe and the insurgence of neo-Nazi groups… How will things unfold?

Most Read

Hezbollah SG reveals war details on Al Mayadeen for the first time

Hezbollah SG reveals war details on Al Mayadeen for the first time

  • Politics
  • 8 Jul 2025
Major ambush in Gaza kills 6 Israeli troops, injures dozens

Major ambush in Gaza kills 5 Israeli troops, injures 14

  • Politics
  • 8 Jul 2025
Israeli soldiers are seen in Beit Hanoun ahead of an operation by the al-Qassam Brigades, undated (Al-Qassam Brigades Military Media)

'Israel' on blast as media exposes report discrepancies in Gaza ambush

  • Palestine
  • 8 Jul 2025
Yemen Navy sinks ETERNITY C ship, shares footage of operation

Yemen Navy sinks ETERNITY C ship, shares footage of operation

  • Politics
  • 9 Jul 2025

Coverage

All
The Ummah's Martyrs

Read Next

All
The Freedom Flotilla ship Handala as it departs for Gaza, where it aims to break the maritime blockade at a port in Syracuse, Sicily in southern Italy on July 13, 2025. (AFP)
Palestine

Freedom Flotilla's Handala departs Sicily in bid to break Gaza siege

The container ship CMA CGM Laperouse, left, docks at the Georgia Ports Authority's Port of Savannah, Sept. 29, 2021, in Savannah, Ga (AP)
Politics

US shipbuilding woes deepen as tariffs, outdated policies backfire

Gaza war raises ethical questions for ex-Obama, Biden officials
Politics

Mercenary firm tied to Gaza war crimes hires Obama-Biden PR operatives

'Israel' targets children in Gaza collecting water
Palestine

'Israel' strikes Gaza kids fetching water, blames it on 'malfunction'

Al Mayadeen English

Al Mayadeen is an Arab Independent Media Satellite Channel.

All Rights Reserved

  • x
  • Privacy Policy
  • About Us
  • Contact Us
  • Authors
Android
iOS