The ongoing war between Russia and Ukraine has intensified. As the war escalates, the anger of countries around the world against Russian President Vladimir Putin is also increasing. Describing the decision to attack as wrong, many countries including the US have imposed tough economic sanctions on Russia. The Russian currency ruble has collapsed, markets are in turmoil, foreign reserves have been frozen and the country's big banks are in ruins. Meanwhile, giants like Apple and Nike have taken a big decision and stopped the sale of their products in Russia. At the same time, according to the report on Wednesday, the European Union (EU) has dealt a blow by pulling seven Russian banks out of SWIFT.
The large effect of distance from Swift
According to a report, the strictest sanctions are to keep Russia's financial system separate from SWIFT. SWIFT is a system related to international financial transactions and more than 11,000 financial institutions in more than 200 countries around the world are connected to it. Iran is a great example of the impact of being out of it. In 2012, SWIFT liquidated Iran's banks due to international sanctions. This reduced Iran's oil export revenue by more than half. Now the same situation can happen in Russia as well.
Apple took a big step
For Russia, which is constantly facing sanctions, it would not be wrong to say that the war with Ukraine is taking a toll on it. In a big move, an American tech giant and the world's most valuable company Apple has banned the sale of all its products in Russia. Along with this, Apple has also limited other services. In a statement issued by the company, it was said that Apple Inc. Russia has stopped the sale of the iPhone and most of its other products in Russia after the invasion of Ukraine. Apple stressed that the company is with all those who have been victims of violence. This is the reason that in the country of 14.5 crore people, it has stopped its services with immediate effect.
Nike also made a big announcement
Shares of the company fell to a session low after Apple banned the sale of products in Russia and restrictions on other services. After this decision, however, the company's shares closed down 1.2 percent at $163.20. Along with Apple, athleticwear maker Nike also followed suit by announcing a halt to sales of its product in Russia. This step taken by these two big companies of the world is being considered as a big setback for Russia.
The effect of restrictions will be visible in the long run
Significantly, after the start of the attack on Ukraine, one after the other, many countries including America, Britain, Australia, Japan has imposed strict economic sanctions on Russia. The US has even banned travel on Russian President Vladimir Putin and Russian Foreign Minister Sergei Lavrov. Western countries are considering these sanctions as the most effective way to respond to Russia's aggression. Even though it is too early to say anything about the impact of these restrictions, as the effect of these restrictions may not be visible in the short run, they are widespread and can show very bad effects in the long run.
ban on biggest banks
The international community has unilaterally and collectively imposed several economic and diplomatic sanctions on Russia. America and Britain have come to the fore and imposed sanctions on Russia's five largest banks Sberbank, VTB Bank, Novikomb Bank, Promsvyaz Bank, Okritiya Bank. Canada and Australia have also followed in the footsteps of the US. So Germany has signaled to halt the Nord Stream 2 gas pipeline project. Along with the US, Poland, the Czech Republic, Bulgaria, and Estonia have closed their airspace to Russian airlines.
Attempt to ban foreign reserve
As part of the crackdown on Russia, the European Union has completely stopped the management of the Reserve Asset of the Central Bank of Russia. Russia was banned from SWIFT financial payments on Saturday after the war broke out. Apart from this, an attempt was also made to block Russia's reserves of about $ 640 billion, so that it could not use this fund. Significantly, due to the ban on SWIFT international payments, there is a lot of pressure on the Russian currency ruble.
The impact of sanctions on the market
After the attack on Ukraine, the effect of Western sanctions was immediately visible and Russia's stock market crashed badly. The MoX index was down over 33 percent. Along with this, the Russian currency ruble is in bad shape and on Monday the ruble broke more than 30 percent. This turmoil has had a very bad effect on the billionaires of the country as well. The Russian currency ruble had hit a low of $117 against the US dollar.
Digital payment services banned
Russian customers have been barred from using Apple-Pay and Google-Pay services after the US imposed financial sanctions on Russia. Customers of several banks in Russia reported that they were unable to use their bank cards with these digital payment platforms. In this regard, the Central Bank of Russia also said that customers of banks coming under the restrictions will not be able to pay with the cards of these banks abroad. That is, the cards of the banks which have been banned will not be able to be used with Apple-pay, Google-pay services. Let us tell you that 29 percent of Russian people use Google-pay and 20 percent use Apple-pay.
Big companies have left Russia
Russia's important industries have suffered a major setback due to the continuous sanctions imposed by Western countries. Meanwhile, petroleum company Shell has announced the closure of all joint ventures with Russian-owned gas company Gazprom. On the other hand, British Petroleum ie BP had recently announced that it is selling its stake in the Russian oil company Rosneft. In addition, giant automaker Volvo has said that it is closing its factory to make trucks in Russia. Mercedes also went a step ahead and said it would end its partnership with the Russian truck maker.
The economy will be hit hard
Regarding the economic sanctions being imposed one after the other, it has been made clear by the Western countries that the purpose of the sanctions being imposed on Russia is to punish Russian President Vladimir Putin against his decision. The sanctions announced so far have targeted Russia's banking and financial system. These sanctions are intended to hurt the Russian economy. French Finance Minister Brune Le Mayer said in an interview to a French TV channel on Tuesday that we will create a situation that will destroy the Russian economy.
The plight of Russia's rich
According to a recently released report, the country's 116 billionaires have lost more than $126 billion due to the Russia and Ukraine crisis since February 16. If this war drags on further, their wealth will decline further. The report noted that Russia's MoX index closed down 33 percent last week after the invasion of Ukraine began on Thursday and the ruble closed after falling to a record low against the US dollar. On Thursday alone, billionaires suffered an estimated $71 billion in huge losses. On Thursday, Russia's five richest Alperov, Mikhelson, Mordashov, Potanin, and Kerimov suffered the most.
understand the restrictions as
Sanctions are harsh measures that apply to diplomatic, economic, and cultural relations between countries. These sanctions are imposed as a whole or target the business. Economic sanctions are multifaceted and include travel restrictions and financial sanctions. Financial sanctions restrict financial markets and services in addition to freezing assets. However, there is a flurry of such sanctions against Russia as well. The report quoted a Russian diplomat as saying that sanctions due to the war against Ukraine would hurt Russia's economy and banking system. He said that this would also destabilize the global economy, as it would create an atmosphere of fear and mistrust.
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