The US stops Russian bond payments to increase pressure on Moscow
Gold prices eased today as the US Dollar stood its ground on prospects of further sanctions against Russia. An interest rate hike by the US Federal Reserve also weighs in on the prices.
On Monday, the US enforced another sanction on Russia. According to a US Treasury spokesperson, the United States stopped the Russian government from paying holders of its sovereign debt more than $600 million from reserves held at US banks. The largest payment was due on Monday - $552.4 million principal payment on a maturing bond – and the US government decided to cut off Moscow’s access to the frozen funds. The move was meant to force Moscow to determine whether it would use the money to pay its debts or other purposes, including supporting its war effort.
If Russia fails to make its next bond payments within its pre-defined timeframes or pays in Rubles where Dollars, Euros, or other currencies are specified, it will constitute a default.
The US 2-year Treasury yields reached their highest level since early-2019, while the 10-year yields jumped on Monday.
Sources: investing.com, reuters.com
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