No winners in a war of sanctions (Opinion)
- Russians are less likely to suffer as Mr.Putin ordered government officials to close their bank accounts and sell off properties abroad.
- The capital outflow from Russia has increased, in first 2 months of 2014 to $35 billion as against $60 billion whole of last year.
- According to deputy head of the Russian Union of Industrialists and Entrepreneurs (RUIE), the outflow will rise to $200 billion pushing the account into red this yr and the stock market has lost 17%.
- With economic sanctions, Russia is facing no access to western bank credit for Russian companies and closing of foreign funding for Russian entities.
- Russia is bracing for possible sanctions and moved its $200 billion worth of U.S. Treasury bonds out of the U.S as it is 11th largest foreign holder of U.S. Treasury bonds totalling $138.6 billion.
- A ban on financial transactions will freeze the assets of $500 billion of Russian companies leading to slowing down Russian’s growth from 2.5% to 0.
- Russia’s trade sanctions of imports account for 40% of Russia’s consumption share of food imports reaches 50%, while Moscow can compensate for a shortfall in western supplies by stepping up purchases in the BRIC countries.
- A ban on western high technologies effects government plans to modernize industry. Arms exports suffer in defence sector, as high-tech weapon-Su-30MKI platforms supplied to India, have key systems & components sourced from western manufacturers.
- U.S. economic sanctions Russia will dump American Treasuries, refuse to pay off loans to U.S. banks, drop the dollar as a reserve currency and create an alternative currency system.
- Economic Minister plans not to have dollar contracts with China, India, Turkey instead have contracts in national currencies which could be applied to oil and gas companies also.
- Russian companies borrowed $700 billion abroad more than its estimated investment over $240 billion.
- Russian sanctions will bring Russia closer to China which will led to nightmarish scenario for the U.S. Russia’s policy launched earlier with the construction of an oil pipeline to its Pacific coast and China escalates defense sales to China and reorient its energy exports from Europe to the East.
- Ukraine Crisis
- Economic Sanctions on Russia
- Forex reserves
- BRIC nations