The United States Treasury has blocked access for the Russian government to use US banks for bond payments, forcing Russia to either pay in dollars from its own reserves or to default.

Defaulting would anger investors who have previously dealt with Russia, and would further damage their already-deteriorating reputation globally.

Speaking on Monday, a spokesperson from the US Treasury said: “Beginning today, the US Treasury will not permit any dollar debt payments to be made from Russian government accounts at US financial institutions.

“Russia must choose between draining remaining valuable dollar reserves or new revenue coming in, or default.”

The war in Ukraine is still ongoing, though Russian troops are beginning to withdraw further north towards allies Belarus, and east back to the recently established 'independent' regions of Donetsk and Luhansk. Casualties have been high on both sides, with civilians also suffering greatly as a result, but what seems to have been presumed an easy victory from the Russian authorities has dragged on for weeks and weeks. The resulting retaliatory sanctions from the west have plunged Russia into economic contraction, with recession on the horizon.

According to S&P Global, Russia's economy has shrunk as fast as it did in May 2020 in the early days of the pandemic. Russia's Composite PMI was 38.1 points for March; down from 52.1 in February. The weakening of the rouble has caused sharp inflationary pressures, and business confidence has dropped as the world protested President Putin's actions in Ukraine.