The United States’ sanctions against Russia are undermining confidence in the U.S. dollar and may force other countries to ditch the currency, a Russian financial analyst has said. The analyst said contrary to the West expectations, the sanctions against Russia have failed to destroy its economy.
Russia’s Frozen Assets
According to Alexander Razuvaev, a Russian economist and financial analyst, the United States sanctions policy against Russia will undermine the dollar’s position as the world reserve currency. Razuvaev cited the U.S. plans to transfer Russia’s frozen assets to Ukraine as an example of Washington’s actions that may result in more countries dumping the greenback.
In his remarks published by a local publication, the financial analyst also referred to the U.S. Federal Reserve interest rate hikes as another act that is undermining the dollar’s reserve currency status. To counter these acts, Razuvaev suggested that Russia should double down on its ongoing effort to wean itself from the dollar-dominated financial system.
Sanctions Have Failed to Destroy the Russian Economy
Razuvaev predicted that countries like Turkey and Azerbaijan are likely to follow in China’s footsteps and may even settle trades using the digital ruble. According to the analyst, China has been dumping American bonds and paying for Saudi Arabian oil with its currency.
After Russia invaded Ukraine in February 2022, Western countries led by the U.S. responded by imposing economic sanctions on Moscow. In addition, billions of dollars of Russian money held in foreign banks were frozen in what was seen as the West’s attempt to weaken Russia. However, despite the sanctions and asset freeze, Russia has continued its war against Kyiv, raising questions about the effectiveness of the punishment meted out so far.
Meanwhile, Razuvaev is also quoted in the same report explaining his thoughts on the impact of the sanctions and how they have failed to destroy the Russian economy.
“America’s actions undermine the authority of the dollar; they inflicted the strongest blow on their own. We will see this in gold prices if they rise sharply. The United States, I think, was counting on the destruction of the Russian economy within three to four months, and then wanted to return the assets,” Razuvaev said.
He also intimated that the United States’ stance against Russia is akin to planting a bomb under the dollar.
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