US Treasury takes additional measure to avoid default

US Treasury Secretary Janet Yellen

© APA | US Treasury Secretary Janet Yellen

# 25 January 2023 15:41 (UTC +04:00)

The US Treasury Department took an additional "extraordinary measure" Tuesday to keep the government from defaulting on its debt obligations, with the move coming less than a week after the nation hit its debt ceiling set by Congress, APA reports citing Anadolu Agency.

US Treasury Secretary Janet Yellen said she will be unable to invest fully in the Government Securities Investment Fund, known as the G Fund, until the debt ceiling is raised or suspended. The fund is part of the Thrift Savings Fund under the Federal Employees’ Retirement System.

"The statute governing G Fund investments expressly authorizes the Secretary of the Treasury to suspend investment of the G Fund to avoid breaching the statutory debt limit...By law, the G Fund will be made whole once the debt limit is increased or suspended," she said in a letter sent to congressional leaders.

The G Fund is invested in short-term US Treasury securities, while the payment of its principal and interest is guaranteed by the US government.

Yellen again urged Congress to suspend or raise the debt limit to avoid a default on any obligation of the government.

The world's biggest economy hit its debt limit Thursday, and Yellen said the Treasury has started using "extraordinary measures" to avoid default.

The US government has never defaulted on its debt, while the debt ceiling has been raised a total of 22 times between 1997-2022.