The Russian currency lost 30% of its value and fell to a record low against the US dollar on Monday (28). In an attempt to stem the ruble’s fall, the Russian Central Bank raised the country’s interest rates to 20%.
O CNN Specialist in economics Alexandre Schwartsman explained how the sanctions imposed on the country caused this collapse in the economy.
The new wave of sanctions against Russia, implemented this weekend, is particularly severe. In addition, after the United States banned dollar transactions and froze part of the Russian Central Bank’s US currency reserves, the country is left with increasingly scarce options to try to contain the ruble’s devaluation.
In Schwartsman’s assessment, the sanctions went beyond expectations. “Perhaps Russia was not expecting something that would limit the ability to use its own reserves. Russia built up these dollar reserves with an eye on the possibility of sanctions.”
The decision to cut Russian banks from Swift, a payment system that connects financial institutions around the world, is also very impactful, pointed out the CNN Specialist.
“It’s as if you forbid a Brazilian bank to make Doc, Ted or Pix. The bank would be isolated. Russia has options for alternative payment systems, but they are few,” she explained.
See more in the video above.
Source: CNN Brasil
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