For example, we should recall that oil is denominated in USD, what will be the impact on oil supplies of Russia is shut out of SWIFT ? We have already a little bit of visibility into this answer…while the headlines show that Russia was kicked out of SWIFT, in reality the implementation of the sanctions show that only certain banks have been excluded while other Russian banks are still being allowed to transact. Notably, with Russia being a huge exporter of energy, particularly natural gas into Europe, the potential for knock-on effects that will cause market dislocations in numerous industries is significant. Ostensibly, booting Russia out of SWIFT has the impact of being very disruptive to global trade, which has seen supply chains in many industries yet to recover from the pandemic halt. The second, and in my opinion this is the most shocking measure- Western nations have frozen the currency reserves of the Russian Central Bank. The first one is the banning of Russia from SWIFT, which is a transnational system used to facilitate payments in global commerce. What I am paying attention to and closely tracking are two measures in particular. Over the weekend escalating conflict between Russia and Ukraine led to some unprecedented economic sanctions taken by Western countries in retaliation to Russia’s invasion of the Ukraine.
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