China News Agency, New York, February 27 (Reporter Wang Fan) Several American experts said on the 27th that the restrictions on the Russian central bank announced by the United States and the European Union a few days ago will have a very destructive impact on the Russian economy. This is an even bigger "killer" than the sanctions imposed on banks to exclude them from the Society for Worldwide Interbank Financial Communications (SWIFT) payment system.
Alexandra Vacroux, executive director of the Davis Center for Russian and Eurasian Studies at Harvard University, told a reporter from China News Agency on the 27th that excluding some Russian banks from the SWIFT payment system would make them International financial transactions are more difficult than in the past, and the restrictions imposed on Russia's central bank will prevent the country from using frozen foreign exchange reserves, an important resource it plans to deploy to try to weather the economic crisis.
The United States and the European Union issued a joint statement on the 26th saying that in response to Russia's military actions in Ukraine, they decided to impose five sanctions on Russia, including excluding some Russian banks from the SWIFT payment system and imposing restrictions on the Russian central bank. In order to prevent its allocation of international reserves to weaken the impact of sanctions.
In this regard, Julia Friedlander, director of economic strategy at the Center for Geoeconomics of the Atlantic Council and a former U.S. Treasury Department official, said that "the sanctions imposed by the United States and Europe on the Russian central bank were unexpected." The sanctions imposed by the central bank of a large country are unprecedented, and their financial impact is huge.
As for some Russian banks to be delisted from SWIFT, she said that sooner or later Russia will find a countermeasure, but the transaction cost will be higher and the transaction will be more difficult.
Josh Lipsky, director of the Atlantic Council's Center for Geoeconomics, who previously worked at the International Monetary Fund, pointed out that sanctions on Russia's central bank could be devastating to the Russian economy.
At present, of the more than $600 billion in international reserves of the Russian central bank, more than $400 billion in foreign exchange reserves are deposited in foreign-issued securities or in cash and deposits of foreign banks.
If the United States and Europe freeze these resources, Russia's ability to use foreign exchange reserves to resist financial sanctions will be greatly reduced.
Lipsky said that since Russia cannot use its foreign exchange reserves to intervene in the ruble exchange rate, the price of the ruble may fall further, and the depreciation of the ruble will inevitably accelerate inflation, which will threaten social stability.
On the issue of social stability, Vackros said that there have been people queuing up to withdraw money in Russia, even if the Russian central bank has promised in advance that it will ensure that all banks in the country have enough cash to call on the 28th, in case the sanctions trigger banks. run.
When emphasizing the significance of the measures of the United States and Europe to restrict the Russian central bank, the above-mentioned experts agreed that the "SWIFT delisting" sanction is also an extremely important "big killer", which makes the sanctioned banks largely disconnected from the global financial system.
Friedlander said countries that were removed from the SWIFT payment system had to work around transaction methods, and some potential transactions could be difficult to execute, which would eventually lead to a sharp drop in government revenue.
When the Crimea crisis broke out in 2014, Western countries considered using "SWIFT delisting" to sanction Russia.
According to a report released by the Carnegie Moscow Center, according to Russia’s assessment at the time, being excluded from the SWIFT payment system could shrink Russia’s GDP by 5%.
At present, the details of the "SWIFT delisting" sanctions imposed by the United States and Europe on Russia have not been announced.
However, the US financial media CNBC quoted a senior official of the Biden administration as saying, "We have now locked down the 10 largest financial institutions in Russia, which hold nearly 80% of the total assets of the Russian banking industry." (End)