Although the recovery of the Russian ruble is wrongly used as proof that Russia is coping with Western sanctions, there are signs that the country’s financial sector is recovering after the initial shock due to the introduction of sanctions against Moscow, writes the London Financial Times.
The British paper states that the economists of the Institute of International Finance (IIF), Elina Ribakova and Benjamin Hildenstock, rightly point out that the jump in the value of the ruble should not surprise anyone. Imports have dropped significantly, interest rates have doubled, strict capital controls have been introduced, and Russia continues to accumulate foreign revenues by selling oil and gas.
Russia’s oil and gas revenues are “absolutely monstrous”, according to the Financial Times, citing an IIF estimate that Russia earned more than $ 1 billion a day in March, which will help it make up for it if there is no change in sales of those energy sources. central bank’s foreign exchange reserves, frozen by the West.
Although the operations of the Russian central bank regarding foreign exchange reserves are limited due to sanctions, due to the high surplus, Russia should be able to recover “lost reserves” in a relatively short period of time, the paper reports.
It seems that the Russian banking sector has also stabilized, after the citizens withdrew a large amount of money from their accounts in the first days after the Russian attack on Ukraine, it is stated.
The IIF concludes that if the West wants to keep the pressure on Russia, and especially if it wants to increase it, it will have to constantly expand the sledge, for example by removing more Russian banks from the international payment system SWIFT, according to the London daily.
The next big step, however, would be an embargo on oil and gas exports, which IIF experts estimate as possible, the paper adds.
Analysts at the Financial Times believe that the next steps are likely to further tighten sanctions on the Russian financial sector, with the potential exclusion of additional Russian institutions from the SWIFT system.
They also state that it is less and less probable that the opposition to the embargo on the import of Russian energy, which is still quite high in many European countries, will be able to last for a longer period of time if new evidence of Russian war crimes in Ukraine appears.