Bloomberg News reported earlier on Tuesday that the Biden administration was ready to allow the pardon to expire on May 25, which could bring Moscow to the brink of default.
“This is under consideration but I do not intend to preview it at this time,” the official told Reuters. “We (Russian President Vladimir Putin) are looking at all options to increase the pressure on Putin.”
Bloomberg says the administration has decided to extend the waiver as a way to maintain financial pressure on Moscow.
Following Russia’s invasion of Ukraine, Western sanctions prohibited transactions with the Russian Ministry of Finance, the Central Bank, or the National Asset Fund.
However, a temporary general license 9A issued by the Treasury Department’s Foreign Asset Control Office on March 2 made an exception for the purpose of “receiving interest, dividends, or maturity with debt or equity”.
That license allowed Moscow to continue to pay investors and avoid defaults on its government debt, and to continue collecting coupon payments from U.S. investors.
It expires on May 25, after which Russia will have about $ 2 billion in external sovereign bond payments before the end of the year.
Some market participants speculated that the Biden administration might extend the waiver, so as not to penalize U.S. bondholders.
The U.S. Treasury Department did not immediately respond to a request for comment.