The U.S. Treasury Department is expected to tighten sanctions this week on Russia, threatening about $1 billion owed to bondholders for the rest of this year and putting the country once again on the edge of default.
Treasury Secretary Janet Yellen said last week she’s unlikely to extend an exemption expiring Wednesday that allows Russia to make payments on its foreign-currency bonds to U.S. investors. That decision will close all loopholes allowing any such transactions, according to a person familiar with the matter.
So far, the world’s biggest energy exporter has been able to send funds through the plumbing of the international financial system, staving off Russia’s first foreign default in a century. But every step in the transactions has become more complicated since Russia’s foreign-currency reserves were frozen as punishment for Vladimir Putin’s invasion of Ukraine at the end of February.
