new Delhi: Sanctions imposed by the US and its allies on Moscow for attacking Ukraine could push Russia into recession and begin turning it into a closed economy, a senior US Treasury official said on Friday.
The official, who did not wish to be named, said in remarks that the Treasury saw Russia continue to push for its ruble recovery against the dollar despite heavy inflation, dwindling exports and shortages, reported Reuters news agency.
What is America’s position on Russia’s economy?
Inflation has risen to 6 percent over the past three weeks, according to a US official, and is a better indication of the impact of sanctions inside Russia that highlight the ruble’s declining purchasing power. He said the black market ruble exchange rates were well below the international rate.
As the West imposed initial sanctions to freeze nearly half of the Russian central bank’s $630 billion foreign currency assets and strip major Russian banks from the SWIFT international transaction network, the ruble lost half its value against the dollar.
However, the currency touched a five-week high on Friday before settling in the 83-84 range against the dollar.
But the Treasury official noted that this would not prevent a sharp contraction in Russia’s economic output, which external analysts now forecast at around 10 percent this year, up from 2.7 percent during the first year of Covid-19 in 2020. The percentage contraction was much worse. global pandemic.
“The economic consequences Russia is facing are dire: high inflation that will only get higher, and a deep recession that will only deepen,” the official said.
In fact, the Treasury official insisted that the cumulative effect of sanctions on banks, wealthy elites associated with Russian President Vladimir Putin, key industrial sectors including US export controls deny Russia access to critical technologies, which would help Russia fight the Cold War. will lead to its existence. Economy
The official said Russia, primarily a producer of commodities and raw materials, is unable to produce its own consumer and technology goods.