Ukraine: Dominic Raab hails UK economic sanctions on Russia
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Despite harsh sanctions battering its economy, Russia still appears to be unleashing hell on Ukraine. On Monday, it was forced to more than double its interest rate in response to the sanctions after the ruble plunged to record lows. And the stock market remains closed amid fears of a massive share sell-off. But amid domestic chaos, Russia claims it can power through and avoid the severe impacts threatened by the sanctions.
It’s invasion has only got more brutal, with the civilian death toll weighing in at an alarming 2000, while 874,026 have reportedly fled the country
But some parts of Russia’s economy remain unscathed, despite the targeting of banks its removal from the SWIFT payments system.
Still running rampant is Russia’s gas, which continues to be exported to the West in vast quantities.
The EU remains significantly dependent on Russian gas, accounting for 40 percent of its supplies in total.
And as Russia is capable of ramping up gas prices, and it turn sending its profits soaring, this could be a way out for Putin.
Russia’s gas conglomerate, Gazprom, has already seen record profits as a result of restricted flows being sent to Europe, moves which sent EU prices soaring.
While the EU is set to consider a re-think of its energy strategy next week, many analysts have tipped that Europe would not be ready to cope without Russian gas just yet.
And now, Russia had struck huge gas deals with both China and Pakistan
Gazprom said on Monday that it signed a contract to design a natural-gas pipeline that will send up to 1.8 trillion cubic feet to China per year via Mongolia.
China also announced last week that receive wheat imports from all parts of Russia.
Russia has also struck a deal to send natural gas, as well as 2 million tons of wheat to Pakistan after the countries’ leaders were said to have “great discussions”.
Putin can also reportedly fall back on the country’s gold reserves as Western sanctions cause havoc to the country’s currency.
The Bank of Russia has also said is set to start purchasing gold just again on the domestic precious metals market.
The central bank spent six years quickly building up a large supply of gold and doubled its holdings to become the largest sovereign buyer.
At the end of January, Russia had 2,000 tons of gold according to data from the International Monetary Fund (IMF).
But there is yet another way that Russian banks could swerve the impacts of Western sanctions.
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The Biden administration is now working on a “focused tactical strategy” to stop from using cryptocurrency as a method to dodge its sanctions.
US officials said this is one of several areas they are looking at to make sure sanctions on Russia have maximum impact.
Prof David Szakonyi, from George Washington University, said that an boosted reliance on cryptocurrency would be an obvious method Russia is likely to take to bolster its financial transactions.
But he said that “it’s unlikely it’ll serve as a substitute for corporate transactions over time”.
But Ari Redbord of TRM labs, a blockchain intelligence company, told Al Jazeera: “It is very difficult to move large amounts of crypto and convert it to usable currency.
“Russia cannot use crypto to replace the hundreds of billions of dollars that could be potentially blocked or frozen.”
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