Sanctions put Russia in an economic vise and West still has more options, experts say — via financialpost Russia economy
Measures targeting Russia’s central bank froze a significant portion of the country’s US$650-billion of reserves, preventing the government from using those emergency funds to shore up its economy against the Western assault, analysts said.
While this isn’t a large amount compared to other countries, the bans and prohibitions are on top of international sanctions unleashed in recent days, including a declaration over the weekend that some Russian banks would cut off from SWIFT, the global inter-bank messaging platform that facilitates the bulk of international transactions.And observers say the West has even more economic firepower to deploy if needed.
The ruble, which has been under pressure since before Russia made good on a threat to invade Ukraine last week, fell to its lowest level on record. It sunk more than 30 per cent after leaders in Canada, the European Commission, France, Germany, Italy, the United Kingdom, and the United States issued a joint statement condemning Putin’s “war of choice” and committing to ensuring the removal of “selected Russian banks” from the SWIFT system.
Clifford Sosnow, a partner at law firm Fasken Martineau DuMoulin LLP in Toronto, said the combined sanctions will make it “exceedingly” difficult to move dollars into and out of the Russian market and cause “general disruptions of supply chains involving Russia.” However, some observers noted that there is still some firepower left in the financial arsenal, though using it could hurt some G7 nations that still rely heavily on Russian oil and gas exports.
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