Speed Reads

dollars on ice

Russia can no longer pay its debts with dollars held in U.S. banks

The United States Treasury on Monday blocked Russia from making debt payments using dollars held at U.S. banks, a move that could force Russia to deplete its domestically held dollar reserves or even default on its loans, Reuters reported Tuesday.

According to Reuters, Russia had two payments due on Monday — "a $552.4 million principal payment on a maturing bond" and an "$84 million coupon payment ... on a 2042 sovereign dollar bond" — both of which were blocked by the Treasury.

"Russia must choose between draining remaining valuable dollar reserves or new revenue coming in, or default," a Treasury spokesperson told Reuters.

The Treasury's new restrictions come as multiple nations have imposed or threatened new sanctions against Russia after Ukrainian forces discovered hundreds of dead civilians in the Kyiv suburbs.

On Tuesday, Reuters reported, the European Union announced that it would ban imports of Russian "coal, wood, chemicals and other products worth about nine billion euros ($9.86 billion) a year."

Despite the international crackdown on Russia's economy, however, the Russian rouble has rebounded to its pre-war value, The Washington Post reported Thursday. The Post attributed the recovery to a mixture of strong oil and natural gas exports, limits on currency exchange imposed by Russia's central bank, and a decline in "panicked customer withdrawals."