US threatens default on Russia

The United States has cut off Russia's ability to pay its debt using frozen dollars in American banks

Because of the Ukraine invasion, the West sanctioned roughly half of Russia's foreign reserves, or $315 billion

The US Treasury had previously allowed Russia to use frozen assets to pay back investors in dollars, but the Biden administration this week barred Russia from doing so

To avoid default, Russia may have to pay its debts in rubles. According to Fitch Ratings, either action would be a default

Since large amounts of our reserves are blocked in foreign countries, these transfers will be serviced in rubles

As well as cutting off Russia's access to dollars, the Biden administration announced new sanctions on Russian financial institutions and individuals

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