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Rich and (almost) broke at the same time?
Russian President Vladimir Putin
Photo: MIKHAIL METZEL / KREMLIN POOL / SPUTNIK / EPA
The US government wants to further increase the economic pressure on the Russian leadership.
The Treasury Department in Washington has therefore taken steps that could push Russia to the brink of at least technical insolvency.
So far, Treasury Secretary Janet Yellen's agency had granted an exemption that allowed US investors to accept bond payments from the Russian government despite the existing sanctions.
A corresponding special license, which made this flow of money possible, was not extended.
The Ministry of Finance announced this step on Tuesday, and the special permit expires on Wednesday.
Thanks to this exemption, Russia has so far been able to transfer payments due to its creditors in the USA.
If payments due cannot be made on time, the country would be insolvent.
Small debt, big impact?
If Russia were actually declared insolvent, it would be a significant loss of face.
Countries that have gone bankrupt usually have great difficulty raising funds on the international financial markets years later.
However, Russia's current problems differ from previous defaults by government debtors.
The possible insolvency is not the result of empty coffers.
On the contrary, the high oil and gas prices have brought record-breaking revenues to Russia for months.
In April alone, revenue from the commodities business was $28 billion.
The problem is that the sanctions are hindering the payment of the debt.
In addition, the sums involved are relatively small.
President Vladimir Putin long ago identified sovereign debt abroad as a possible source of his own vulnerability and accordingly took care to keep debt levels with foreign creditors low.
According to an evaluation by the Finnish central bank, Russia's foreign debt was just 3.5 percent of gross domestic product and a value of around 60 billion dollars.
Around $100 million is currently pending, which Russia would have to transfer to creditors in the United States by Friday.
By the end of the year, Russia's outstanding debts are expected to amount to between one billion and two billion dollars.
It is still unclear whether the relatively small amounts outstanding are sufficient to officially determine Russia's insolvency.
The Bloomberg news agency reports that the behavior of Russia's creditors outside the United States will be decisive.
The threshold is usually at least 25 percent of affected government bonds.
According to Bloomberg, most owners of Russian government bonds are based outside the United States, many of them in Europe.
If the payments are not made, Russia also has a period of up to 30 days to find a solution.
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