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3 Feb, 2022 11:13

Russia reveals plans in case of cut-off from US dollar

The Kremlin has urged calm in the face of massive US sanctions
Russia reveals plans in case of cut-off from US dollar

Moscow is prepared for the possibility that harsh US sanctions could restrict its banks’ access to dollar transactions, the Kremlin has said, admitting that the potentially unprecedented measures have officials worried.

Kremlin Press Secretary Dmitry Peskov told journalists on Wednesday that Moscow is well aware of the threat of massive sanctions coming from the American side amid an ongoing row over Ukraine. “Certainly, the Kremlin is concerned, because the sanctions behavior of the US is absolutely unpredictable,” he said.

The spokesman went on to say that Washington “has preserved its unpredictability in international matters in this regard. We have plans. There are plans for risk hedging, for minimizing the consequences of such unpredictable actions.”

“But I will say it once more,” he went on, “we are consistently calling for the US to refrain from provocative actions and from worsening tensions on the European continent.”

Bloomberg reported in December that the US and EU were considering potential sanctions, if Russia decided to invade Ukraine, that would target the nation’s biggest banks, restrict the ability of investors to buy Russian debt on the secondary market, and make it difficult for the country to convert rubles into dollars or other foreign currencies.

Last month, US President Joe Biden promised harsh measures against Russia in the event of an invasion, including barring its banks from transacting in dollars. Congress is also considering a bill that would implement similar sanctions and would also go after Russia’s energy sector, in addition to providing $500 million of military aid to Ukraine.

The US and other Western countries have been warning for months that they fear Russia could be planning an imminent invasion of its neighbor. Moscow has repeatedly denied the accusations and has called for security deals that would limit the expansion of NATO into Ukraine. Documents leaked this week show that Washington and the US-led military bloc rejected the demands, but proposed steps to ease tensions, including better exchange of information about military plans.

In December, Russia announced it was developing new shared financial structures with China, with one Kremlin aide emphasizing the need for “an infrastructure that cannot be influenced by third countries.”