U.S. Treasury Secretary Janet Yellen Says The US Will Block Moscow From Making Its US Debt Payments Forcing Russia Into A Technical Default

A file photo shows Treasury Secretary Janet Yellen testifies before the Senate Appropriations Subcommittee, June 23, 2021. (Reuters) 

Politico: US to end Russia debt servicing allowance, says Treasury chief Janet Yellen  

She also floated the idea of imposing a tariff or price cap on Russian oil exports — which has yet to catch on in Brussels. 

BONN, Germany — Washington is willing to let a provision allowing Russia to make bond payments expire, U.S. Treasury Secretary Janet Yellen announced Wednesday — a move that increases the chance Moscow will default on its foreign debt. 

The clause, which falls under the U.S. sanctions regime, has allowed Russia to service its foreign debt so far with the approval of the U.S. Treasury’s Office of Foreign Assets Control (OFAC). It's set to expire on May 25. 

"The expectation was for it to be time limited. It’s reasonably likely to expect that the license will be left to expire," Yellen said, speaking to reporters in Bonn, Germany, ahead of a G7 finance ministerial meeting. "A final decision hasn’t been taken yet, but I think it’s unlikely that it would continue."  

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Update: US ‘likely’ to scrap Russia debt payment exemption: Yellen (AFP) 

WNU Editor: Russia's next debt payment is on May 27, two days after Moscow will be blocked from making a payment. My gut tells me that international financial markets are going to go through a roller coaster ride next week and beyond. 

On a side note. After U.S. Treasury Secretary Janet Yellen made her remarks, the Dow Jones tumbled 1,000 points (as of 14:00 EST). The blame is on poor results from Target and Walmart, but I think it is more than just that.