Russia acknowledges its most 'painful' sanctions.
(Baonghean.vn) - On December 25, Russian Central Bank Governor Elvira Nabiullina acknowledged that the seizure of Russian assets, including the money of millions of private investors, and restrictions on international payments are the most "painful" sanctions imposed by Western countries.
Nabiullina told the Russian news agency RBK that the administration had assessed the risks of sanctions since 2014 and had prepared for many of them. The US and EU imposed the first round of restrictions after Crimea was annexed by Russia following a referendum in response to the armed coup in Kyiv in 2014.
“The major banks, when sanctioned, were largely prepared for this scenario. Disconnecting from SWIFT has been a threat since 2014, so the major banks are building national payment infrastructure. We have diversified our reserves and increased our holdings of the yuan and gold,” the head of the Russian central bank said in an interview.
Last year, the US and EU imposed a series of financial restrictions on Russia in response to Moscow's military operations in Ukraine. These sanctions included disconnecting Russian banks from the SWIFT interbank information system, prohibiting Russia from repaying debts in US dollars, freezing Russian assets abroad, and removing Visa and MasterCard payment cards from the country. The sanctions deprived Russia of the ability to conduct international transactions in US dollars and euros.
“We have been able to address most of the challenges related to the financial sector. But there are still unresolved issues in the financial sector, including cross-border payments. Yes, supply chains are being built, they are constantly changing, but this remains a problem for many businesses,” said Nabiullina.
The central bank governor believes that Western countries freezing Russian assets is a “very negative” signal for central banks worldwide because it is a “violation of fundamental principles of precautionary security.” “Millions of people not subject to sanctions still have their assets frozen. This is a very troubling issue,” she added.
An estimated €260 billion ($285 billion) of the Russian central bank's assets were locked up in G7 countries, the EU, and Australia following the outbreak of the Ukraine conflict in late February last year, with the majority of reserves held in Europe. Furthermore, around 5 million Russian private investors found their assets frozen in accounts with international financial institutions.
