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  • Writer's pictureCrest Economics

West unite to cripple Russian economy with heavy sanctions- March 2022

The US Government and European allies have recently put into place sanctions to cripple Russia’s economy as the invasion of Ukraine ensues. Even before the economic measures were placed, Russia’s economy revealed cracks of distress – with crowds of Russians rushing to withdraw cash from ATMs and the value of the nation’s currency plunging dramatically.

European leaders have imposed measures that cut Russia from its financial reserves and under a new regime, all people in US, Europe Union, UK and Canada are prohibited from trading with Russia’s central bank. These restrictions aim to deprive Russia’s ability to stabilise its economy. Further sanctions by the Treasury were placed on entities tied to Russia’s sovereign wealth fund, including its management company and subsidiaries which has in effect eliminated any possibility of raising sovereign debt.

A range of Russian banks are being curtailed from the Swift international payments system by the EU, US, UK and Canada. This will stop them from operating worldwide, and effectively block Russian exports and imports. The European Union has also announced it will shut down airspace to Russian planes and support Ukraine’s purchase of weapons. Furthermore, a large range of bans on aircraft and aviation parts to Russia as well as exports of Elaborately Transformed Manufactures (ETM) have been issued from the US and EU.

Putin has responded to western statements by putting the country’s nuclear forces on alert, although Ukraine and Russian officials planned on Monday to hold their first diplomatic talks since the invasion began.

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