Russia to recession, closed economy even though Ruble rebound: US

Successful sanctions imposed by the United States and his allies in Moscow because they attacked Ukraine pushed Russia into a recession and began to turn it back into a closed economy, a Senior Treasury US official said on Friday.

The official, spoke with the terms of anonymity, told reporters that Treasury saw Russia in line with steep inflation, reducing exports and shortcomings despite the recovery of its ruble against the dollar. The official rejected a rebound as driven by strict capital control and foreign exchange sidewalks, not market strength.

Inflation that has been running as high as 6% over the past three weeks is a better indication of the performance of sanctions in Russia, revealing reduced purchasing power, the official said, added that the black market exchange rate was far below international tariffs. .

After Western democracy imposed early sanctions that crippled about half of the $ 630 billion Russian central bank in foreign exchange assets and cut several Russian key banks from the Swift International Transaction Network, Rubel lost the dollar.

Since then recovering the pre-invasion value, touching five weeks in trading Moscow early on Friday before settling in the range of 83-84 with the dollar.

But Treasury officials said that it would not stop steep contractions in the Russian economic output outside the analyst now estimating about 10% this year – far worse than the contraction of 2.7% suffered for 2020, the first year of Pandemic Covid-19.

“The economic consequences faced by severe Russia: high inflation which will only be higher, and the inner recession will only be deeper,” the official said.

Close the Russian economy

Treasury officials said the cumulative effect of sanctions on the bank, oligarchy richly bound to Russian President Vladimir Putin, the main industrial sectors and export control A.S. The Russian access to critical technology, is to encourage the existence of the Cold War.

But Russia, producers, especially commodities and raw materials, are not equipped to produce consumer goods and technology, the official said.

“As a closed economy, Russia will only consume what they produce, which will be the stark adjustment,” officially added.

The process will not occur immediately. China, India and other countries are still trading with Russia, and can replace several items and parts that Russia usually bought from Western companies.

However, access to semiconductors, software, and other technologies are limited because of US exports limitations that will also prevent China from selling Moscow every chip because all semiconductors are made with technology or software A.S.

The United States intends to sanctions and export sidewalks to weaken the Russian economy and paralyze the ability of the Russian military to buy spare parts and equipment for war efforts, the official said

Washington feels comfortable with the enforcement of sanctions and export control so far, but still in finding any violations.

Treasury comments came when Senior Biden Administrative officials traveled the world to suppress world leaders to suppress sanctions on Russia.

Washington plans to maintain the liberation of humanity from sanctions, given the increasing problem of insecure food and the role of Russia as the main wheat producer, said financial officials.

Another exception is intended to protect Western financial institutions that accommodate Russian assets, through a license to allow Russian debt payments made.