Business

15 September, 01:53 PM

Russia’s financial sector takes significant hit from Western sanctions

Russia’s financial sector suffered hundreds of billions of dollars in “direct losses” from sweeping sanctions imposed by the United States and its allies over Russian dictator Vladimir Putin’s invasion of Ukraine, the Bloomberg news agency reported on Sept. 14.

In its report, Bloomberg referred to an estimate presented in an internal Russian Finance Ministry document.

The estimate –  which notes there have been significant hits to the stock market, bank capital as well as $300 billion in foreign-exchange reserves being frozen by the restrictions – was included in a presentation for a top-level meeting of Russian officials on responding to sanctions held last month.

People familiar with the event confirmed the contents, speaking on condition of anonymity to discuss matters that aren’t public.

The report didn’t put a total value on the hit from sanctions, which focuses on the financial system and doesn’t address the impact on the broader economy.

It said instruments including derivatives, hedging, Eurobonds and initial public offerings had “practically disappeared.”

At the same time, the presentation doesn’t address the broader economic impact of the restrictions, which have pushed Russia into a recession that’s likely to extend into next year.

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