One major source of income for Russia is exempt from sanctions, which can keep suppling the Kremlin with much-needed funds.
Value of the ruble has hit record lows as sanctions have crippled the Russian economy and forced the country's stock market to close Monday. Yet, even as Russia suffers financially, its government will likely continue to be funded for operations due to Russia's status as one of the largest suppliers of energy in the world.
On Monday, the United States imposed more sanctions on Russia, including on its central bank, as punishment for President's invasion of Ukraine. All the measures taken since the Russian attacks began in the early hours of Thursday should increase Russia's inflation and drive investors away, but it likely not shut down the Kremlin.
"Those transactions will be exempt from the onerous financial sanctions, so that energy supplies can continue to flow into Europe," Jeffrey Schott, a trade and sanctions expert and senior fellow at the Peterson Institute for International Economics, toldRussian President Vladimir Putin's government may be safe in terms of its finances for now. In this photo, Putin is seen during a joint press conference at the Kremlin on September 9, 2021 in Moscow.
"Overall, the Western sanctions are designed to starve funds from the Russian government and its military operations; the exemptions provide a feeding tube ," Schott toldThough Russia will undoubtedly be hurt financially by the recent sanctions, the country came into 2022 with an excess of money.
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