The Russian economy is at stake.. Western sanctions are besieging Moscow

MOSCOW

- In a case, the first of its kind, the exchange rates of the dollar and the euro against the ruble reached record levels, after the Group of Seven countries, in addition to a number of other countries, imposed more new sanctions against Russia.

The most important of these sanctions are the freezing of foreign assets of the Russian Central Bank, and the imposition of serious restrictions on the work of leading commercial banks, as well as on the export of high-tech products to Russia.

historical precedent

The dollar exchange rate for the first time in history rose above 100 rubles, trading on the stock markets in Russia was canceled, and in London the value of shares of Russian companies collapsed, and in turn, the Central Bank, the Ministry of Finance and the Moscow Stock Exchange took measures to prevent the crisis from worsening.

According to Kremlin spokesman Dmitry Peskov, the authorities have prepared in advance for the sanctions that were imposed in recent days, so the state has every opportunity to minimize the damage.

The Russian government assures that there are no risks to financial stability, and according to Finance Minister Anton Silyanov, the banks are fully supplied with cash, and plastic cards continue to operate in the country, and at the same time, customer funds for all credit institutions are saved and made available.

On the morning of February 28, the Bank of Russia responded to the Western sanctions imposed on it that led to the collapse of the ruble, by immediately raising the key interest rate to 20%. At the same time, the Russian government reintroduced the rule for the mandatory sale of foreign exchange earnings by exporters, and as From March 1, issuers will be required to sell up to 80% of foreign exchange earnings on the open market.

Back to the Iron Curtain

In parallel, the United States and the European Union are preparing to impose new sanctions on Russia, and European Commission President Ursula von der Leyen said that at a later time, EU leaders will consider a new package of sanctions against Russia, aimed at restricting its access to capital markets.

According to the European official, this package includes financial sanctions that will limit Russia's access to capital markets, and the impact of these sanctions will be very strong, as she put it.

Scenes of queues in Russian banks and in front of ATMs continue to withdraw payments of foreign currency (Al-Jazeera)

The effect of sanctions

Against the background of the introduction of restrictions, and in an attempt to control the state of confusion and anxiety among citizens about their savings, the press service of the Central Bank confirmed that bank cards of all credit institutions in Russia will continue to work to pay for goods, services, transfers and other transactions through ATMs without restrictions.

The Central Bank also confirmed that customers' funds with all banks, in addition to the accounts linked to cards, are saved and made available to citizens at any time.

However, this did not end the state of anxiety and the feeling of the impact of the sanctions on a segment of Russian citizens, as scenes of queues in banks and in front of ATMs continue, despite the relative calm after the Central Bank pumped about 200 billion rubles to meet the shortage of liquidity.

Moreover, the problem of withdrawing hard currency deposits still exists, and ATMs are often out of service.

Maria Gorchkova, a housewife, says that she had always trusted banks as the best place to save savings, but now she feels that the house is safer for this, given the uncertainty of the future regarding the ruble rate and the availability of liquidity.

She told Al Jazeera Net that she trusted the government's statements, but the scenes of citizens' queues in front of ATMs raised her fear for her savings, which prompted her to withdraw the bulk of them from the reserve for any variable.

disable projects

As for Yekaterina Barsanava, who works in an airline, she said that the problem for her is no longer providing liquidity from ATMs, but rather obtaining a loan, after the interest rate was raised to about 20%, after it was a maximum of 9% a few days ago.

And she continued, in an interview with Al-Jazeera Net, that this would disrupt the projects of many families, especially with regard to buying a home through loans, because a large percentage of them depend on loans as the only option to achieve this.

difficult predictions

According to some economists, the ruble has become an unpredictable currency, and now its price will be determined by the amount of foreign exchange earnings sold by companies, as well as the Russian currency could reach new minimums if new sanctions are imposed on exporters.

Economic analyst Victor Lachon considers that the current crisis as a result of the sanctions differs from the previous one in 2014 in terms of the benefit of those who owned large amounts of hard currency from the decline in the price of the ruble, and the tendency to buy real estate.

Now, it does not appear to be the case, with the interest rate on loans raised to 20%.

In his opinion, the current situation is different from the crises of 2008 and 2014, when there was a fall in the stock market and a sharp depreciation of the ruble, but there was no military operation.

For this reason, the population’s reaction to saving will be different. The coming period may witness a growth in demand for short-term loans, but its volume will be smaller than in previous crises. The emotional and psychological state of many Russians does not help buying homes.