Previous sanctions have denied Russia access to some types of food and technology. The latest package aims at Russia’s basic economic health as a pressure point.
“The signs are that the Biden administration wants to make it hurt a bit more,” said James Nixey, director of the Russia-Eurasia program at Chatham House, a research institution in London. “This is just a first salvo.”
The United States ultimately severed Iran from the global financial system, something Washington could bring about given that the American dollar is the world’s reserve currency, the means of exchange in transactions around the planet. Any bank anywhere on earth that handled business for Iran risked being cut off from the international payment network and denied access to dollars.
Russia has very limited need to borrow money from abroad, having cut its deficits sharply following sanctions that were imposed after its annexation of Crimea in 2014.
“We’ve had a period of austerity, fiscal austerity, ever since that sanctions shock,” said Elina Ribakova, deputy chief economist at the Institute of International Finance, a trade association representing international banks. “They prepared themselves.”
Thursday’s order on Russian debt applies only to American financial institutions, but it could prompt multinational companies beyond the United States to recalculate the risks of transacting with the Russian government.
“It puts them on notice, if you like,” said Mr. Nixey. “Every company that is significantly in Russia is listening to this very, very carefully and wondering if it is a good idea, reputationally or in terms of political risk, whether they should continue doing business at the same volume that they are.”
Andrew E. Kramer contributed reporting from Moscow.