Sanctions against Russia would not go unnoticed by the rest of the world, the International Monetary Fund warned in a recent statement following a meeting of the Executive Board. Although the global economy is expected to face negative consequences, the West is deliberately taking these risks in an attempt to stop the armed conflict in Ukraine.
“The sanctions on Russia will also have a substantial impact on the global economy and financial markets, with significant spillovers to other countries. In many countries, the crisis is creating an adverse shock to both inflation and activity, amid already elevated price pressures,” the document says.
Separately, the IMF noted restrictions on the Bank of Russia and the disconnection of a number of Russian banks from the SWIFT system.
“The sanctions announced against the Central Bank of the Russian Federation will severely restrict its access to international reserves to support its currency and financial system. International sanctions on Russia’s banking system and the exclusion of a number of banks from SWIFT have significantly disrupted Russia’s ability to receive payments for exports, pay for imports and engage in cross-border financial transactions. While it is too early to foresee the full impact of these sanctions, we have already seen a sharp mark-down in asset prices as well as the ruble exchange rate,” the fund said.
