America and European countries have taken big steps to weaken Russia. Several Russian banks have been barred from using SWIFT. SWIFT stands for – Society for Worldwide Interbank Financial Telecommunication. It is called SWIFT for short. Russia’s exit from Swift is seen as the toughest move by the US and Europe. This decision has left Russian President Vladimir Putin uneasy. Let us know what is SWIFT, how much will Russia be affected by being out of it, how it works.
What is SWIFT?
SWIFT is the largest international payment gateway. Russian banks will no longer be able to use this gateway. The US and Europe have taken this step to isolate Russia from the international financial system. Their aim is to weaken Russia economically. Putin is believed to have been stunned by the decision to oust Swift. This is the reason why he has been warned against the use of nuclear weapons.
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How important is Swift to Russia?
SWIFT is very important for Russia. This is because Russia is a major supplier of energy to the world. It exports oil and gas worth billions of dollars to many countries. He uses the SWIFT platform to receive its payment. This is a very easy mode of payment. With this, the transaction is completed in real time. The biggest thing is that this platform is considered very secure. To be separated from it means to be isolated from the financial system. Exclusion from SWIFT means in the financial world the same way as cutting off a country from the Internet.
How does Swift work?
SWIFT is used by 200 countries and 11,000 banks around the world. It plays the role of middleman in the transfer of money. It verifies the details of the transaction. For this he uses financial messaging services. After verification, the transaction is completed. Swift’s office is located in Belgium. It is monitored by the central banks of 11 major countries. These include Canada, France, Germany, Italy, Japan, Netherlands, Sweden, Switzerland, England, Belgium and the US.
How will this move affect Russia?
Experts say that separating Russian banks from SWIFT will have a big impact on Russia’s economy. With this, Russia will have to use other means to receive and give payments in the world. This will take a long time to complete the transaction. This will have an impact on Russia’s trade relations with other countries. Especially in the matter of energy supply, there will be a big problem. This is the reason why this move has had a big impact on Russia’s currency. The ruble has declined 30 percent.
Right now only a few Russian banks are banned
Currently, only a few Russian banks have been barred from using SWIFT. The US and Europe have not yet included all Russian financial institutions under its ambit. They believe that if Russia continues its arbitrariness, the rest of its banks and financial institutions will be brought under its purview.
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