While the US and the EU constantly emphasize that the sanctions against Russia are having an effect and have significantly weakened Russia’s financial market and economy, the Kremlin emphasizes that the West is doing much more damage to itself and that there are plenty of alternative buyers for natural gas and petroleum. But now the head of the Russian central bank is warning against underestimating the effects of Western sanctions on the economy.
“The sanctions are very powerful, their influence on the Russian and global economy should not be downplayed,” Elvira Nabiullina told MPs on Tuesday. “It is not possible to isolate yourself from their influence,” Nabiullina continued. One reason is that potential new Russian partners are afraid of getting caught up in the maelstrom of sanctions.
Partial mobilization already has a negative effect
At the same time, Russia’s top currency watchdog stressed that Russian banks, which have been heavily attacked, are now very flexible. Corporate lending rose 9.9 percent from January to October, faster than 9.7 percent in the same period last year. “We expect the positive dynamics in lending to continue and at the same time banks will be able to fulfill the new program of providing vacation loans to mobilized soldiers and their relatives,” Nabiullina said.
Those drafted into military service under President Vladimir Putin’s partial mobilization are entitled to grace periods on mortgages, consumer loans and credit card loans for the duration of their service and for 30 days thereafter. Mobilization is already having a negative impact from Russia public finances, consumer demand and businesses.
capital controls remain
Nabiullina currently sees no need to further relax the capital controls that have been in place since the spring. The ruble has outperformed other major currencies this year, thanks in part to capital controls. However, this also has a downside: Revenues from Russian exports – such as oil, gas and other commodities – are declining because they are often settled in dollars and euros.
Source: Krone
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
