President Joe Biden will issue an executive order authorising the US government to sanction any sector of the Russian economy and will use it to restrict Russia's ability to issue sovereign debt.
The actions are to punish Moscow for interfering in the 2020 US election, senior Biden administration officials said on Thursday.
The officials, who spoke on condition of anonymity, said Biden would bar US financial institutions from taking part in the primary market for rouble-denominated Russian sovereign bonds from June 14.
US banks have been barred from taking part in the primary market for non-rouble sovereign bonds since 2019.
The latest step is part of a wider array of sanctions the White House plans to announce on Thursday to make Russia pay a price for "malign" actions such as election interference, cyber-hacking, the use of chemical weapons and reports that it offered Taliban militants bounties to kill US soldiers in Afghanistan.
Among the sanctions to be unveiled are the blacklisting of about 30 entities as well as orders expelling about 10 Russian officials from the United States, one person familiar with the matter said.
Russia denies meddling in US elections, orchestrating a cyber hack that used US tech company SolarWinds Corp to penetrate US government networks, and using a nerve agent to poison Kremlin critic Alexei Navalny. It has also brushed off allegations of putting bounties on US soldiers in Afghanistan.
Biden on Tuesday spoke to Russian President Vladimir Putin to raise concerns about these issues and the build-up of Russian forces in Crimea and along the border with Ukraine, even as he proposed a summit between the two men.
"We don't think that we need to continue on a negative trajectory in the relationship," said one official.
"However ... we will defend our national interests and impose costs for Russian government actions that seem to harm our sovereignty."
The executive order on "Blocking Property with Respect to Specified, Harmful Foreign Activities of the Government of the Russian Federation," was signed by Biden on Wednesday and will be made public on Thursday morning, US officials said.
The sovereign debt action, which will specifically cite the Russian central bank, national wealth fund, and finance ministry, extends a step the United States took in 2019, when it barred US financial institutions from buying non-rouble-denominated debt directly from Russia in the primary market.
The first US official said the Russian rouble-denominated sovereign debt market was valued at about $US185 billion, about a quarter of which is held by foreign investors. US investors make up about half of the foreign holdings, he said.
"Judging from history, removing US investors as buyers in this market will likely cause a chilling effect that raises Russia's borrowing cost, along with capital fight and a weaker currency - all of which leads to slower growth and higher inflation," said this official.
Australian Associated Press
