Russia admits to 'most painful' sanctions
(Baonghean.vn) - Governor of the Central Bank of Russia Elvira Nabiullina admitted on December 25 that the confiscation of Russian assets, including money from millions of private investors, and the restriction of international payments are the most "painful" sanctions imposed by Western countries.
Ms Nabiullina told Russian news agency RBK that the regulator had been assessing the risk of sanctions since 2014 and was prepared for many of them. The US and EU imposed the first round of restrictions after Russia annexed Crimea following a referendum in response to the 2014 armed coup in Kiev.
“Major banks, when they were sanctioned, were largely prepared for this scenario. The disconnection from SWIFT has been a threat since 2014, so major banks are building up national payment infrastructure. We have diversified our reserves and increased the share of yuan and gold,” the head of Russia’s 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 actions in Ukraine. The sanctions included disconnecting Russian banks from the SWIFT interbank messaging system, banning Russia from repaying its debts in dollars, freezing Russian assets abroad and banning Visa and MasterCard payment cards from the country. The sanctions have deprived Russia of the ability to conduct international transactions in dollars and euros.
“We have been able to deal with most of the challenges related to the financial sector. But there are also issues in the financial sector that have not been fully resolved, including the issue of cross-border payments. Yes, supply chains are being built, they are constantly changing, but this is still a problem for many businesses,” said Ms. Nabiullina.
The central bank governor believes that Western countries freezing Russian assets is a “very negative” signal for central banks around the world because it is “a violation of the basic principles of precautionary security”. “Millions of people who are not subject to sanctions still have their assets frozen. This is a very painful issue,” she added.
An estimated 260 billion euros ($285 billion) of Russian central bank assets were locked up in G7 countries, the EU and Australia after the Ukraine conflict broke out in late February last year, with the bulk of the reserves held in Europe. On top of that, some 5 million Russian private investors saw their assets frozen in accounts held by international financial institutions./.
