Kremlin Considers Western Sanctions as an Insulation from Banking Crisis, Indicating Russia's Isolation from Global Financial Systems
According to representatives of the Kremlin, the recent banking crisis in the US will not have any negative effects on Russia. They have stated that Russia is protected from any fallout caused by the collapse of Silicon Valley Bank. This protection is due to the fact that sanctions related to the conflict in Ukraine have already isolated Russia from the global financial community.
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US banks had a difficult week, experiencing many challenges. Nevertheless, the Kremlin is taking a positive outlook on the situation.
The Kremlin believes that the collapse of Silicon Valley Bank will not affect Russia since it has been disconnected from the global financial system.
On Tuesday, Kremlin spokesperson Dmitry Peskov stated that our banking system has links to some parts of the global financial system. However, the West has placed illegal restrictions on it, mainly due to the country's invasion of Ukraine last year, as he stated to TASS state news agency.
According to the media source, Peskov stated that we have some form of protection against the detrimental impact of the current crisis occurring outside of our country.
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According to Insider, Peskov stated that the economy of Russia is steady and "resting on a strong foundation."
On the other hand, Russia experienced a shortage of credit as a result of the aftermath of the subprime mortgage disaster in the United States in 2008, that eventually resulted in the Global Financial Crisis, similar to many other countries around the world.
After the economic downturn, the nation aimed to elevate Moscow into a prominent financial center on the world stage. However, this aspiration has suffered a setback due to the broad sanctions imposed on Russia.
Many big banks and accounting companies are leaving Russia or planning their departures due to the ongoing conflict in Ukraine. After the invasion, some Russian banks found themselves banned from using SWIFT, a messaging service that helps facilitate international transactions. As a result, Russia's economy has become increasingly isolated and they are experiencing difficulties with cross-border transactions. The nation's primary energy exports have also been restricted, with a cap on the price of oil at $60 per barrel.
However, despite the challenges faced, the President of Russia, Vladimir Putin, has emphasized the strength of the country's economy. The statistics service of Russia reported that the Gross Domestic Product (GDP) decreased by only 2.1% in 2022. Nevertheless, a few concerns have been raised regarding the accuracy of the statistics as certain key economic figures were not made public last year.
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As reported by Bloomberg on March 2, Oleg Deripaska, a prominent tycoon in the aluminum industry, stated during the Krasnoyarsk Economic Forum in Siberia that Russia's funds were dwindling and therefore the country would require the assistance of foreign investors.
According to the media, Deripaska stated that there will be lack of funds in the upcoming year.
