The United States has halted Russia’s efforts to pay more than $ 600 million in foreign government bonds as it seeks to ease economic pressure on Moscow. The US Treasury Department blocked JPMorgan, Russia’s foreign correspondent bank, from making payments due on its 2022 and 2042 bonds late Monday, a source familiar with the matter told Insider. JPMorgan declined to comment. A Treasury official told Reuters the ministry had prevented Russia from paying bondholders using reserves held in US banks. The official said the move was intended to make life more difficult for the Russian government and force it to use its own available US dollars, according to Reuters. The Ministry of Finance did not immediately respond to a request for comment. The blockade came as the United States weighed in on further sanctions on Moscow, following widespread reports of Russian atrocities in Ukraine, including the execution of civilians. US President Joe Biden has said that his Russian counterpart Vladimir Putin should be tried for war crimes. Russia, by Monday, had surprised foreign investors by holding back its bond payments. The Treasury Department had consistently authorized JPMorgan and other lenders to make payments. But the agency’s dramatic change in policy raises new questions about Russia’s ability and willingness to pay off its foreign currency debts. Russia was to pay about $ 550 million in a bond that expired on Monday. It initially faced a $ 2 billion payment, but bought the issue worth about $ 1.45 billion in rubles, mostly from domestic bondholders. The government was also going to make a $ 84 million voucher payment on a $ 2042 bond. Russia must now decide whether to look for its own US dollar reserves. As part of the harsh Western sanctions imposed on the country over its invasion of Ukraine, the central bank has frozen almost half of its foreign exchange reserves worth about $ 640 billion. Moscow now has a 30-day grace period to make payments on both bonds, otherwise it may go bankrupt. The last time Russia failed to fully pay its foreign debts was in 1918, after the communist revolution. Read more: Nuclear: The head of research on a thematic investor reveals 8 stocks of nuclear energy under radar that are ready to be launched next year as the war in Ukraine and climate change accelerate the removal of fossil fuels.
