Russian Debt Payments Confront US Treasury With a Tough Call

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As Russia faces another round of payments on its sovereign debt, Biden administration officials are weighing whether forcing Moscow into default for its invasion of Ukraine would really be the best outcome, Bloomberg News reported. Treasury Secretary Janet Yellen said Tuesday that the matter is being “actively examined” before a crucial deadline in two weeks, and a decision will be made shortly. Russia is constrained by economic sanctions over its invasion of Ukraine and won’t be able to service its foreign debt, unless the US acts before May 25 to extend a license that permits American banks and individuals to accept the payments. The Treasury could grant exceptions for certain cases. “We want to make sure we understand what the potential consequences and spillovers would be of allowing the license to expire, and we have not yet made a decision,” Yellen said without elaborating on the pros and cons. Read more.