Russia's economy braces for the impact of increasing western sanctions, admits Central Bank head
6:14 PM EST, December 25, 2023
The U.S. Treasury Department declared on Friday that it plans to impose further sanctions on the banking sector. This covers entities that assist in bypassing current restrictions and enable Russia to procure essential military equipment, including semiconductors and ball bearings.
In the meantime, on December 15, the European Union approved a twelfth set of sanctions against Russia. This specifically involves diamonds originating from, exported from, or traversed through Russia. The terms also include Russian stones processed in third countries. Brussels also resolved to impose an embargo on importing Russian Liquid Petroleum Gas (LPG), taking effect after a 12-month transition period. Moreover, the EU fortified the prohibition on exporting sensitive technologies and products to Russia and broadened the range of dual-use products.
Russia braces for more sanctions
Elvira Nabiullina, Head of the Central Bank, has played a vital part in helping Russia adapt to this new economic environment. Nabiullina has assisted the Kremlin in mitigating the effects of extensive sanctions that the West imposed in response to the assault on Ukraine, as reminded by Bloomberg.
In an interview with RBC News, she discussed the effects of the existing restrictions on the economy. She stated that the economy is restructuring "quite rapidly," as companies adapt to the new circumstances.
"We may be tempted to believe we're, as the saying goes, 'knee-deep in the sea' after weathering the initial storm, but we must prepare for intensifying sanction pressure.", stated Elvira Nabiullina.
The toll of sanctions on the Russian economy
She also confessed that Russia has faced challenges in responding to all the issues associated with the sanctions. She emphasized that cross-border payments continue to pose a "problem for many companies." The country also confronts "very serious" challenges in long-term financing development.
"We cannot assert that we have addressed all challenges", admitted Elvira Nabiullina.
Nabiullina expressed optimism about the progress in the financial sector and its stability. Notably, throughout the entire conversation, no reference was made to the ongoing conflict in Ukraine.
