Previous sanctions have denied Russia access to certain types of food and technology. The latest package aims at Russia’s basic economic health as a pressure point.
“There are indications that the Biden administration wants to hurt it more,” said James Nixey, director of the Russia-Eurasia program at Chatham House, a London research institute. “This is just the first salvo.”
The United States eventually separated Iran from the global financial system, with some Washington stating that the US dollar is the world’s reserve currency, a means of exchange in transactions around the planet. Any bank anywhere on Earth that handles trade for Iran is cut off from the international payment network and denied access to the dollar.
Russia has a very limited need to borrow money from abroad, following sanctions imposed after the annihilation of Crimea in 2014 that its shortage accelerated.
“We have had a period of austerity, fiscal austerity since that time,” said Alina 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 only applies to US financial institutions, but it may prompt multinationals beyond the United States to reorganize the risk of transactions with the Russian government.
“It puts them on notice, if you like,” Mr. Nixie said. “Every company that is important in Russia is listening to it very, very carefully and with thought if it is a good idea, in terms of reputational or political risk, whether they continue to trade in the same volume that they are. “
Andrew E. Kramer Contributed to reporting from Moscow.