US to provide $100m in military aid to Ukraine after Bucha killings; bars Russia from bankrolling debts in dollars

The US Treasury Department says it started blocking the Russian government from making debt payments using dollars held in US financial institutions.

The department says it took the action on Monday as part of sanctions against Russia.

Russia earlier said it used rubles to redeem about 72 percent of its dollar-dominated sovereign bonds that matured on Monday. It said holders of the paper received a total of 124.4 billion rubles, including interest.

But Russia still has to make payments in dollars to redeem the remaining debt and cover interest.

A Treasury Department spokesperson says Russia must choose between draining the dollar reserves it has in Russia or using the new revenue to make bond payments to avoid defaulting on its debt.

The official stressed that the US will make Russia drain funds that could be used for President Vladimir Putin to continue waging war in Ukraine.

Russia now has a 30-day grace period to complete the payments for the remaining government bonds and interest that were due on Monday.

However, market analysts say the recent US move designed to deplete the Russian currency reserves may push Russia toward default on its foreign-currency debt.

Meanwhile, US Secretary of State Antony Blinken says Washington will send an additional $100m in aid to Ukraine to meet its “urgent need” for anti-armor systems.

In a statement, Blinken said this was the US’s sixth drawdown of arms, equipment, and supplies for Ukraine and that it brings the US’s total security assistance to Kyiv to more than $1.7bn since the Russian invasion began.

He added that he was “shocked and appalled” by the killings in Bucha and pledged to work with US allies to ensure accountability by documenting the reported abuses.

The Associated Press news agency, citing a US government official, said the additional aid was for the transfer of Javelin anti-armour missiles.

LENS with AP