Among other steps, Western powers froze about half of Russia’s foreign exchange reserves, barred some Russian banks from the high-security SWIFT banking network, and blocked exports of basic technology to Russia. The United States has also banned the import of Russian oil, gas and oil products. The purpose of the sanctions is to weaken Russia’s economy to the point where it weakens the country’s ability to use its military, a senior Finance Ministry official has said. “Russia has relied on a corner to become a closed economy and Russia is in fact one of the most ill-equipped countries doing well as a closed economy,” said a senior Finance Ministry official. The official predicted that Russia would have a lot of trouble isolating itself on the world stage, because it had long relied on the sale of raw materials to buy consumer goods and sophisticated production equipment. Of course, there are risks that sanctions could exacerbate the supply chain crisis that has pushed inflation in the United States to invisible levels for 40 years. U.S. officials are monitoring supply chains in the United States and Europe, including the supply of base metals and minerals needed in critical production processes, a senior Treasury official said. Similarly, Western powers have granted humanitarian exemptions in order to limit the impact on food prices, which were already high before the crisis began. The senior finance ministry official left the door open to further tighten sanctions against Russia if these supply disruptions are minimized. Western powers also granted permission to allow Russia to pay $ 117 million in interest on its debt last month, averting a highly risky bankruptcy. The purpose of the permit is to mitigate the impact that a bankruptcy would have on Western banks, bondholders and other creditors, a senior Treasury official said. The leave expires on May 25, and a senior Finance Ministry official said no decision has been made on whether or not to extend it.
The artificial recovery of the ruble hides the Russian economic catastrophe
Russia’s economy is being eroded by Western sanctions, and the rapid recovery of the ruble has been made possible only by Moscow’s efforts to support the currency, a senior Finance Ministry official has said. The comments come after some argued that the ruble’s rapid recovery from its initial fall was a sign that Western sanctions had not gone far enough to punish Russia for its invasion of Ukraine. A senior Finance Ministry official said Russia’s economy was sinking into recession and being crushed by a crippling inflation. Although the ruble has recovered to pre-invasion levels, the finance ministry official said the currency’s purchasing power has been decimated by rising prices in Russia. As previously reported by CNN, officials in Russia tried to support the ruble, in part by ordering exporters to exchange 80% of their foreign exchange earnings for rubles, barring Russian brokers from selling securities, and banning Russian residents from making banknotes. transports outside Russia and other steps. The steps artificially boosted demand for the ruble. As a sign of the ruble’s underlying weakness, a black market has emerged in recent weeks to exchange the ruble for foreign currency, a senior finance ministry official said, adding that the ruble was depreciating significantly in this black market.
