(Original title: Russia’s counterattack against Western financial sanctions will limit the flow of funds to unfriendly countries)
Financial Associated Press (Shanghai, edited by Xia Junxiong),On Friday (March 25) local time, the Central Bank of Russia announced that, in response to Western countries freezing some of their gold reserves, it would implement capital controls to limit the flow of funds to unfriendly countries.
The Central Bank of Russia said that all the gold in the gold foreign exchange reserves is in Russia and kept in the vaults of the Russian Central Bank.
In addition, the response measures announced together include restrictions on capital flows, a ban on foreign investors from selling stocks, and a ban on capital outflows from the Russian financial system. Payments of Russian corporate and public debt to state creditors supporting sanctions against Russia are made only with the permission of the government committee.
U.S. President Joe Biden visited European countries this week, and the White House on Thursday unveiled the latest round of sanctions against Russia. In addition to placing hundreds of individuals and entities on the sanctions list, the U.S. and its allies will explicitly limit Russia’s access to gold reserves, with gold transactions tied to the Russian central bank subject to existing sanctions.
British Prime Minister Boris Johnson said on Thursday there was evidence that Russia was trying to use its gold reserves to bypass sanctions, so the West must take steps to ensure that Russian gold does not enter global markets.
U.S. Treasury Secretary Janet Yellen met this week with a bipartisan group of senators to discuss the possibility of freezing Russian gold.
The ruble has depreciated sharply since Western countries began imposing sanctions on Russia, and U.S. politicians worry that Russia will use gold to curb the ruble’s depreciation, as Moscow’s huge gold reserves are enough for the Kremlin to buy other currencies in the international market.