“A default on Russia's sovereign debt would add further pain to Russia's economy and financial system, making it harder for Moscow to find new lending sources and raising future borrowing costs, a US Treasury official said on Monday,” per Reuters.

The official also told Reuters, per the news, “The Treasury believes there are limited direct exposures in the U.S. financial system to Russian sovereign bonds and the main impact would fall on a Russian economy already reeling under the weight of US sanctions.”

FX implications

Markets paid a little heed to the news during the initial hours of the Asian session on Tuesday. Even so, the Antipodeans pared some of the latest losses at the latest.

Read: Forex Today: Dollar on the rise amid mounting tensions with Russia