The E.U. and U.S. response to Russia's invasion of Ukraine has escalated: beyond limiting Russian banks' access to SWIFT, the freeze of assets held by the Central Bank of Russia is far more impactful. A currency crisis has begun for the Russian Ruble
The Russian invasion of Ukraine this week was initially met with platitudes and handwringing that has so often defined the European Union’s and United States’ response to crises in recent years.
. On Saturday, the West announced that some Russian financial institutions would be cut off from SWIFT, the global messaging platform that allows banks to communicate and send funds securely to one another. Japan joined the West on Sunday in such an effort. Russian companies will have a difficult, if not impossible, time importing and exporting goods and services moving forward.
There’s really no other way to put it: the decision by the West to limit Russian banks’ access to SWIFTto freeze the assets of the Central Bank of Russia is equivalent to dropping a financial nuclear bomb on the Russian economy.
and gas – the other is that the Russian economy will almost certainly descend into a sharp recession.The Russian economy is now isolated globally, with only China serving as a potential lifeline. But even then, the Chinese government has prohibited state banks from financing purchases of Russian commodities, a sign that China itself is not looking favorably at recent developments.Reports have emerged over the weekend that, in response to the West’s sanctions, bank runs have begun in Russia .
Now unable to import or export goods and services thanks to the SWIFT sanctions, unable to sell foreign currency reserves thanks to the CBR asset freeze, and a Russian economy ringfenced from the global financial system, a currency crisis has emerged for Russia. Capital controls are just around the corner, as are likely interest rate hikes by the CBR to try and stabilize the Russian Ruble - but neither of those will prove effective so long as Russia presses forward with its invasion of Ukraine.
Australia Latest News, Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Ukraine Targets Russian Politicians’ Crypto Wallets as Russian Banks Are Cut From SWIFT – Bitcoin NewsUkraine is looking to expose crypto wallets used by politicians in Moscow amid warnings that Russia may employ bitcoin to evade sanctions.
Read more »
US, other nations agree to block select Russian banks from SWIFT; over 150,000 Ukrainians fleeThe US, EU, UK and other nations have agreed to block selected Russian banks from SWIFT. Meanwhile, over 150,000 Ukrainians have fled the country. Here's the latest.
Read more »
US, EU, UK to sanction Russian central bank, block SWIFTThe United States, European Union and United Kingdom have agreed to put in place crippling sanctions on the Russian financial sector in retaliation for its invasion of Ukraine.
Read more »
Ukraine crisis: US, EU, UK to remove selected Russian banks from SWIFTThe United States, European Union and United Kingdom have agreed to put in place crippling sanctions on the Russian financial sector in retaliation for its invasion of Ukraine.
Read more »
White House, EU announce expulsion of certain Russian banks from SWIFTRussian President Vladimir Putin announced a military operation in Ukraine early Thursday. A battle is underway for control of Ukraine's capital, Kyiv. The US has warned Russia is seeking to encircle the city, and a Ukrainian official said it has been hit by missiles. Follow here for live news updates from the ground in Ukraine.
Read more »
US, EU, UK agree to remove selected Russian banks from SWIFTSWIFT is a network used by banks to send secure messages about transfers of money and other transactions. Used by 11,000 financial institutions in nearly 200 countries, it's considered the backbone of the international financial transfer system.
Read more »