Arab Press

بالشعب و للشعب
Friday, Jan 30, 2026

US Treasury blocks Russian bond payments, raising risk of default

US Treasury blocks Russian bond payments, raising risk of default

The decision further complicates Russia’s attempts to keep meeting debt obligations amid the sanctions imposed after it invaded Ukraine.

Russia’s efforts to avoid a sovereign default took another blow after the U.S. Treasury halted dollar debt payments from the country’s accounts at U.S. banks.

The decision further complicates Russia’s attempts to keep meeting debt obligations amid the sanctions imposed after it invaded Ukraine. As the government tries to sidestep its first external default in about a century, those restrictions have hampered and delayed the process of transferring money to bond holders.

Other governments are also planning tougher sanctions after allegations that Russian troops massacred civilians in Bucha and other Ukrainian towns. The European Union is proposing to ban coal imports from Russia, which would be a major step-up for a region that’s so far shied away from targeting energy flows crucial to the bloc’s economy.

The U.S. announcement is intended to force Russia into either draining its domestic dollar reserves or spending new revenue to make bond payments, or else go into default, according to a spokesperson for the Treasury’s Office of Foreign Assets Control, who discussed details on condition of anonymity.

“Clearly this latest announcement by the U.S. Treasury is designed to put additional pressure on the Russians,” said Gary Kirk, a portfolio manager at TwentyFour Asset Management. “The alternative payment methods are significantly more punitive and more challenging for Russia and hence it does increase the chances of a technical default.”

Despite warnings from credit-rating companies and others, Putin’s government has so far stayed current on its foreign debt obligations.

But the sweeping sanctions have already led to the seizure of an estimated two-thirds of Russia’s reserves. The central bank says it’s also sold some of its foreign currencies to support the ruble, leaving questions on how long it can pull from its local coffers to pay its debts.

Russia’s foreign-currency and gold reserves were about $604 billion as of March 25, down $38.8 billion from a February peak. Still, it’s reaping in huge sums from exports of energy. Bloomberg Economics expects it will earn nearly $321 billion this year if the commodities continue flowing.


But even with the funds, payments haven’t been smooth, with many delayed by banks doing lengthy checks to ensure they aren’t breaching sanctions.

A once-$2 billion dollar bond that matured Monday served as the most recent stress test, though Russia was able to buy back about three-quarters of the outstanding amount in rubles before the note came due. The latest U.S. move will intensify scrutiny on its ability to pay back the remainder of that debt.

Additionally, coupon payments due Monday on a 2042 bond had yet to reach some investor accounts as of Tuesday morning in London, according to bondholders who declined to be named because they are not authorized to speak publicly.

Russia’s dollar bonds, which were already trading well into distressed territory, fell on Tuesday. The 2042 declined 7 points to about 28 cents on the dollar, according to CBBT pricing.

The U.S. announcement “increases the risk of default, not because of lack of money,” said Lutz Roehmeyer, chief investment officer at Berlin-based Capitulum Asset Management. “The new sanction will cause technical issues with regard to the settlement systems, so it is now an open question how Russia will construct the payment routes.”

Newsletter

Related Articles

Arab Press
0:00
0:00
Close
Saudi Aviation Records Historic Passenger Traffic in 2025 and Sets Sights on Further Growth in 2026
Tesla Ends Model S and X Production and Sends $2 Billion to xAI as 2025 Revenue Declines
The AI Hiring Doom Loop — Algorithmic Recruiting Filters Out Top Talent and Rewards Average or Fake Candidates
Federal Reserve Holds Interest Rate at 3.75% as Powell Faces DOJ Criminal Investigation During 2026 Decision
Putin’s Four-Year Ukraine Invasion Cost: Russia’s Mass Casualty Attrition and the Donbas Security-Guarantee Tradeoff
Saudi Crown Prince Tells Iranian President: Kingdom Will Not Host Attacks Against Iran
U.S. Central Command Announces Regional Air Exercise as Iran Unveils Drone Carrier Footage
Trump Defends Saudi Crown Prince in Heated Exchange After Reporter Questions Khashoggi Murder and 9/11 Links
Saudi Stocks Rally as Kingdom Prepares to Fully Open Capital Market to Global Investors
Air France and KLM Suspend Multiple Middle East Routes as Regional Tensions Disrupt Aviation
Saudi Arabia scales back Neom as The Line is redesigned and Trojena downsized
Saudi Industrial Group Completes One Point Three Billion Dollar Acquisition of South Africa’s Barloworld
Saudi-Backed LIV Golf Confirms Return to Trump National Bedminster for 2026 Season
Gold Jumps More Than 8% in a Week as the Dollar Slides Amid Greenland Tariff Dispute
Boston Dynamics Atlas humanoid robot and LG CLOiD home robot: the platform lock-in fight to control Physical AI
United States under President Donald Trump completes withdrawal from the World Health Organization: health sovereignty versus global outbreak early-warning access
Trump Administration’s Iran Military Buildup and Sanctions Campaign Puts Deterrence Credibility on the Line
Tech Brief: AI Compute, Chips, and Platform Power Moves Driving Today’s Market Narrative
NATO’s Stress Test Under Trump: Alliance Credibility, Burden-Sharing, and the Fight Over Strategic Territory
Saudi Arabia’s Careful Balancing Act in Relations with Israel Amid Regional and Domestic Pressures
Greenland, Gaza, and Global Leverage: Today’s 10 Power Stories Shaping Markets and Security
America’s Venezuela Oil Grip Meets China’s Demand: Market Power, Legal Shockwaves, and the New Rules of Energy Leverage
Trump’s Board of Peace: Breakthrough Diplomacy or a Hostile Takeover of Global Order?
Trump’s Board of Peace: Breakthrough Diplomacy or a Hostile Takeover of Global Order?
Trump’s Board of Peace: Breakthrough Diplomacy or a Hostile Takeover of Global Order?
Trump’s Board of Peace: Breakthrough Diplomacy or a Hostile Takeover of Global Order?
Prince William to Make Official Visit to Saudi Arabia in February
Saudi Arabia Advances Ambitious Artificial River Mega-Project to Transform Water Security
Saudi Crown Prince and Syrian President Discuss Stabilisation, Reconstruction and Regional Ties in Riyadh Talks
Mohammed bin Salman Confronts the ‘Iranian Moment’ as Saudi Leadership Faces Regional Test
Cybercrime, Inc.: When Crime Becomes an Economy. How the World Accidentally Built a Twenty-Trillion-Dollar Criminal Economy
Strategic Restraint, Credible Force, and the Discipline of Power
Donald Trump Organization Unveils Championship Golf Course and Luxury Resort Project in Saudi Arabia
Inside Diriyah: Saudi Arabia’s $63.2 Billion Vision to Transform Its Historic Heart into a Global Tourism Powerhouse
Trump Designates Saudi Arabia a Major Non-NATO Ally, Elevating US–Riyadh Defense Partnership
Trump Organization Deepens Saudi Property Focus with $10 Billion Luxury Developments
There is no sovereign immunity for poisoning millions with drugs.
Mohammed bin Salman’s Global Standing: Strategic Partner in Transition Amid Debate Over His Role
Saudi Arabia Opens Property Market to Foreign Buyers in Landmark Reform
The U.S. State Department’s account in Persian: “President Trump is a man of action. If you didn’t know it until now, now you do—do not play games with President Trump.”
CNN’s Ranking of Israel’s Women’s Rights Sparks Debate After Misleading Global Index Comparison
Saudi Arabia’s Shifting Regional Alignment Raises Strategic Concerns in Jerusalem
OPEC+ Holds Oil Output Steady Amid Member Tensions and Market Oversupply
Iranian Protests Intensify as Another Revolutionary Guard Member Is Killed and Khamenei Blames the West
President Trump Says United States Will Administer Venezuela Until a Secure Leadership Transition
Delta Force Identified as Unit Behind U.S. Operation That Captured Venezuela’s President
Saudi-UAE Rift Adds Complexity to Middle East Diplomacy as Trump Signals Firm Leadership
OPEC+ to Keep Oil Output Policy Unchanged Despite Saudi-UAE Tensions Over Yemen
Saudi Arabia and UAE at Odds in Yemen Conflict as Southern Offensive Deepens Gulf Rift
Abu Dhabi ‘Capital of Capital’: How Abu Dhabi Rose as a Sovereign Wealth Power
×