US halts Russian bond payments, default risk resurfaces

The United States blocked dollar debt payments on Monday from Russian accounts at US banks, raising the risk of a default by Moscow once again.

US Treasury stopped the Russian government from paying holders of its sovereign debt with the more than $600 million of dollar reserves held at US financial institutions.

Foreign currency reserves held by the Central Bank of Russia at US banks had been frozen under the sanctions imposed on the country. The Treasury Department, though, had allowed Russian government to use the funds to make coupon payments on dollar-denominated debt on a case-by-case basis.

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