Russia is unlikely to exit global financial system, says former BC director

in interview to CNN Brazil This Friday (25), former Central Bank director Luiz Fernando Figueiredo said that Russia’s withdrawal from the Swifta financial telecommunications system used by countries and banks around the world.

“Swift is like the fiber optic cable for phone calls. Without it, you cannot communicate. It is the way countries, agents, banks communicate by making payment transactions,” he said.

“Staying outside this system means that you are outside the financial system as a whole, you cannot pay or receive. It is a very serious measure, very unlikely to be applied. I would say in practice it is almost impossible to do,” she added.

The former BC director stated that the application of this sanction to Russia due to the invasion of Ukraine could lead to new geopolitical events, which may not be beneficial for the West.

“This measure has a risk, because it is too strong and, if done, can bring Russia much closer to China, which can help the Russians, since the Asian country has access to the fund”, he analyzed.

Luiz Fernando Figueiredo also said that the US responses were “very mild”, which helped to calm the market into thinking that the conflict may only remain in Eastern Europe.

“You can see that the US sanctions were very light, because you just have to look at the responses of the markets yesterday. The American stock market closed higher, oil, which had a 4.5% rise at the beginning, closed around 1%, a little higher”.

“The Russians already knew what the sanctions were, and in practice the sanctions imposed were light. There was a concern about an oil-related sanction, the Swift issue itself, so the answer could be much bigger. After Biden’s speech yesterday, the markets recovered,” he added.

*Text published by Fabricio Julião

Source: CNN Brasil

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