Biden Administration Poised to Fully Block Russia Debt Repayments After 25 May

LOCAL NEWS

• Biden administration is poised to fully block Russia’s ability to pay US bondholders after a deadline expires next week, a move that could bring Moscow closer to the brink of default. The Treasury Department’s Office of Foreign Assets Control is expected to let a temporary exemption lapse once it expires on May 25.
  • Some Treasury officials argued that allowing Russia to pay its debt would further drain its coffers and redirect resources from military operations in Ukraine. But the administration has decided against extending the waiver as a way to maintain financial pressure on Moscow – BBG
• Surrender of the final 250 troops left in the Azovstal steel plant brings forward more negotiations on prisoner swaps, but not any progress towards a ceasefire. Russia says it will question captured troops, while Zelensky has called for their return to Ukraine.
  • Security expert says control over Azovstal is strategically important for Russia as it allows troops to be redirected north where they are struggling to make gains in the Donbas - bbg
• EU’s Borrell says he does not know how much longer Russia can resist Ukraine if estimates showing losses of roughly a third of its ground forces are accurate. Says this is a world record in terms of losses for an invading country.
  • Security expert says Putin’s goal remains to take the Donbas, but with its military struggling to gain ground, Putin may be forced to consider additional mobilisation by autumn if it has not succeeded in its goals – sky

Data:

• 1700BST: 1QA GDP y/y exp at 3.7% vs 5.0% prior
• 1700BST: May 13 CPI wow exp, 0.13% prior
• 1700BST: May 13 CPI weekly YTD, 11.78% prior