Russia’s attack on Ukraine continues for 8 days. Meanwhile, America and European countries have imposed many types of sanctions on Russia. Most of these are economic sanctions. They seem to have an impact on the economy of Russia. Let us know what restrictions have been imposed by America and European countries so far. We will also know how much impact they are having on different sectors in Russia.
Russia’s financial sector breaks back
The most stringent sanctions have been imposed on Russia’s financial sector. The European Union on Wednesday pulled Russian banks out of the SWIFT messaging system. It is very easy, effective and secure payment gateway for money transfer. Following this ban, Russia’s largest bank Sberbank said on Wednesday that it was exiting the European market. The European Union has also decided not to make fresh investments in the Russian Direct Investment Fund (RDIF). England has also said that it will not make any new investments in RDIF.
The US and the European Union (EU) imposed a freeze on Russia’s central bank on Monday. This has frozen all the assets of the Russian central bank in the US. The effect of this would be that Russia’s central bank would not be able to support its currency, the ruble. It will not be able to use its foreign exchange reserves to strengthen it. Canada and Japan have also announced sanctions on Russia’s central bank.
The impact of sanctions on Russia’s financial sector is beginning to show. Russia’s currency, the ruble, has declined significantly. To keep it from falling further, Russia’s central bank has doubled the main interest rate. Meanwhile, the world’s largest payments companies Visa and MasterCard have said they are imposing sanctions on Russian banks from using their payment networks. American Express, one of the largest US banks, has also said it is suspending all transactions with Russian banks.
Russia’s airline industry cut wings
The sanctions from the US and European countries have had a major impact on the Russian airline industry. Russian airline Aeroflot has been banned. Due to this it cannot fly to European countries, England and Canada. However, furious from this, Russia has also banned flights to these countries. The European Union and Canada have halted supplies of the aircraft, its parts and equipment to Russia. It is worth noting that Airbus is a European company among the largest aircraft manufacturing companies in the world. Therefore, these sanctions have dealt a big blow to the Russian airline industry.
Britain has banned the Russian flag and all ships of Russian companies from using its port. On Saturday, France intercepted a Russian cargo ship belonging to PSB Bank. It was found to be in violation of European sanctions. Volvo Group, one of the world’s largest auto companies, has announced that it will stop supplying trucks and other vehicles to Russia. It has said that it is also going to stop production at its plant in Russia.
The wind of Russia’s energy sector came out
Denmark’s Maersk, Switzerland’s MSC and France’s CMA CGM, the world’s three largest container shipping groups, have said they are going to stop deliveries of non-essential goods to Russia.
The sanctions have also had a major impact on Russia’s energy sector. Germany has taken the biggest step. It has said that it is suspending the certification process of the Norte Stream 2 gas pipeline. This pipeline is very important for the supply of gas from Russia to Germany. Gazprom, one of Russia’s largest oil companies, has been barred from raising funds from Western markets.
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