Putin Troll? Russia Claims Sanctions Means it is ‘Insured’ Against Western Banking Crisis

The Kremlin claimed that Western sanctions imposed on Moscow over the war in Ukraine had insulated the Russian financial system from any potential impact of a possible banking crisis.

Amid warnings of another global financial crisis in the wake of the failure of the Silicon Valley Bank (SVB) — the biggest bank collapse since the 2008 crisis — Russia says it believes sanctions imposed by the United States, United Kingdom and European Union, among others, are effectively “locking in” the Russian economy. Effective from the negative effects of the growing banking crisis.

Whether or not they are based in fact, the comments certainly resemble the West’s gloating or ‘trolling’ as concern grows about the banking system.

Kremlin spokesman Dmitry Peskov said on Tuesday: according “Our banking system has certain connections with some sectors of the international financial system, but for the most part it is subject to illegal restrictions from the collective West,” the Russian news agency TASS quoted.

But Peskov added, “We are, to a certain extent, insured against the negative impact of the crisis that is now unfolding abroad,” suggesting that he thinks Russia may do better than other countries linked to the Western banking system.

A few days after the invasion of Ukraine last February, the European Union, in cooperation with the United States, announced sanctions to ban major Russian banks from SWIFT, the Society for Global Interbank Financial Telecommunications, a Belgium-based financial service that allows banks around the world to . world to conduct transactions quickly and reliably, with trillions transferred through the system each year.

The ban initially caused havoc for the Russian economy and banking system, with the ruble crashing as millions of concerned Russians tried to withdraw their money from Russian banks. However, despite the early turmoil, Russia’s currency eventually rebounded to par with pre-war levels, with the currency supported, in part, by Moscow’s ability to continue selling its capacity – albeit at a discount – to willing buyers such as India. and communist China.

The Kremlin has also been instrumental in trying to use the BRICS coalition of emerging economies (Brazil, Russia, India, China and South Africa) to create an alternative currency to challenge the US dollar, which has been the dominant global currency since the second. World war.

A key part of this strategy appears to be to coax arch-rivals Saudi Arabia and Iran into joining the coalition, which would threaten the ability of the US currency to operate in the so-called “petrodollar”.

If the BRICS countries cooperate with Saudi Arabia and possibly Iran and threaten the petrodollars, this could pose risks to the US economy, as there could be a dumping of dollars into global markets, leading to higher inflation.

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