25.04.2022
On 20 April 2022, CASE Ukraine think tank held a discussion on the topic of sanctions’ effect on Russia
Keynote Points:
- International capital markets are fully closed for the Russians. The Rouble convertibility that has long been the pride of Russia is no longer there.
- Some 2-3 million of unemployed are expected.
- The real consumption levels and its quality are in a catastrophic dive, particularly for the poor groups.
- Jewellery exports, among the first to fall under embargo, have been cut.
- Exports of russian agrarian commodities will be gradually reduced.
- Russia’s metal exports may drastically dwindle due to imposed sanctions. Russia will not be able to re-orient itself even on the large Chinese market.
- Ukraine has destroyed quite a number of tanks and navy vessels so the aggressor will have to restore its military potential and limited arms exports thus losing markets.
- The stock market is completely dead as the current trades at Moscow stock exchange are only about local volumes and local traders. Foreign investors have been practically disconnected from the russian stock market.
- Companies and countries want nothing in common with bloody crude or metals from russian oligarchs. A number of russian investment banks have already been disconnected as a preventive measure.
- Sanctions have been imposed not only on banks but also on all the related infrastructure, specifically, on investment units.
Russia’s central bank’s response to the sanctions has been the classic textbook one for external shocks. - Foreign reserves as an indicator. If we disregard the blocked assets, the reserves slumped at the beginning of sanctions then stabilised owing to continued exports and unsubstantial imports.
- Sanctions is a long story; the russian economy has now adapted to them so new sanctions are needed.
- The sanctions that limit current consumption hitting the pockets of the Russians, their buying capacity and the money turnover inside the economy are no less efficient. From the economic standpoint, sanctions against lay russians are, at least, as efficient as those on crude and natural gas.
Transcript of discussion (please follow the link)