BERLIN – How vulnerable is Russia, how scared can Vladimir Putin be at the idea of the West imposing new, heavy sanctions on him in the event of an invasion of Ukraine? This is what the German newspaper asked itself world. And the bottom line is that, net of the threat to cut Russia out of the Swift payments system, which could still hurt her a lot, Putin has been armored in recent years against any new European and American restrictions.
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“Moscow has prepared itself as never before” for the Western counter-offensive: “reserves are at record levels, public and private debts are minimal, the abandonment of the dollar is at a very advanced stage”, writes the daily.
For years, the Kremlin has pursued the goal of defending itself with ultra-conservative economic policies against external shocks. The double trauma of the sanctions inflicted on Moscow after the annexation of Crimea in 2014 and the simultaneous drop in the price of crude oil from 115 to around 30 dollars a barrel have led Moscow to a decisive rethink of its economic policies. Subsequently, says the Russian banker and adviser to the Moscow Stock Exchange Oleg Vjugin, Putin “began to prepare for an economic war”.
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The national fund, which should act as a buffer and protect Russian pensions from any new crude oil collapses, has been enriched, for example, with oil revenues and is now worth $ 183 billion, the equivalent of 11.7% of GDP.
Since last summer, after gradually decreasing its investments in dollars, in the light of the tensions with the United States, Moscow has completely stopped setting aside reserves in the American currency and has replenished its coffers with euros and yuan. A line also officially married by the Russian Central Bank, which still boasts 630.5 billion in gold and dollar reserves. Dollar reserves plummeted from 50% in 2018 to 16.45 today. But it is equally clear that the dollar still weighs heavily on the trade balance.
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Of course, the “atomic” of exclusion from the Swift global payments system still scares Russia. Although since 2014 it has begun to build an alternative, SPFS, according to the vice president of the central bank, Olga Skorobogatova, only one fifth of the financial flows occurred at the end of 2020 through the national system. Too little not to tremble at the idea of being cut off from the international one.