The U.S. Treasury Department blocked a $636 million Russian debt payment due April 4, by prohibiting payment out of the $300 billion in Russian reserves that the U.S. froze (i.e., stole) at the end of February. April 4 was the due date for a $2 billion bond repayment, and Russia managed to repurchase about $1.4 billion of that with rubles. That left $636 to be paid out of frozen dollars, which the Treasury had been permitting until now. But this time, Treasury prohibited the payment, which means that the clock has started ticking on the 30-day grace period until a formal default is declared.
The intention of London and Washington is explicitly to force Russia to either pay the debt out of its own holdings of reserves (about $350 billion and dwindling), or default. White House spokeswoman Jen Psaki said that the idea is to “impose acute and immediate economic harm on Russia.… The goal is to force them to make a choice.… They are going to be forced to choose between draining remaining valuable dollar reserves … or default.” An unnamed Treasury official cited by the Financial Times was reading from the same script: “Russia must choose between draining remaining valuable dollar reserves or new revenue coming in, or default.”
