In a move designed to increase the chances of a Russian default on its debt payments, the US has barred Russia from paying bond holders through US banks. The Biden administration had previously granted Russia an exemption since the war in Ukraine began, but that exemption will end on Wednesday.

JPMorgan Chase & Co. has noted Russia is faced with roughly $400 million in payments it must make on dollar-denominated bonds on June 23 and June 24.

Timothy Ash, a senior sovereign strategist at BlueBay Asset Management, earlier this month noted to CNBC that given its power to administer trade sanctions, the the Treasury’s Office of Foreign Assets Control, “can act any time to stop Western institutions from processing bond repayments” by Russia. “OFAC can force Russia into default at any time. OFAC is still in the driving seat,” Ash said.

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