Putin DEFAULT Bombshell – New Tactic Unleashed!
(RightWing.org) – The US and its Western allies imposed various economic sanctions on Russia in the wake of its February 24 invasion of Ukraine. So far, the efforts have resulted in the freezing of about of its $640 billion foreign currency reserves. Taking advantage of Russia’s weakened economic state, the US Treasury Department recently pulled some strings to push Russian President Vladimir Putin closer to the country’s first external national debt default in more than a century.
On May 24, the US Treasury Department’s Office of Foreign Assets Control (OFAC) announced its decision not to renew an earlier agreement to extend Russia’s license to pay US bondholders. Without the extension in place, Russia’s license expired on May 25.
The #USA will increase financial pressure on #Russia. Will not renew the GL-9C licence, which allows the #Russians pay their sovereign debt even in the face of sanctions.
The aggressor country is now one step closer to default!
🇺🇦🇺🇸#StopPutin— Kira Rudik (@kiraincongress) May 25, 2022
As a result, Russia will not be able to make billions of dollars of debt payments on time. Roughly $2 billion in payments for bonds held by foreign entities come due before the end of the year, meaning the move will likely force Russia into default within months.
Jay Auslander of the noted international law firm Wilk Auslander LLP told Reuters, “Russia will be in default on a foreign debt” once the grace period expires on any late payments to bondholders. He added that “with the [OFAC] waiver gone, there seems to be no way for [foreign] bondholders to get paid.”
What do you think of the Treasury Department’s decision to push Russia into default? Will it help end the conflict in Ukraine or just hurt investors?
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