Ukraine invasion sanctions: Everything Russians now can’t do

Price of sanctions will be borne by Russians as country potentially stands at brink of economic collapse

Missile strikes apartment block in Ukraine

The US, EU and some Asian countries have pushed back against Russia’s invasion of Ukraine with a plethora of sanctions in an effort to weaken the country and its president Vladimir Putin.

The price of the sanctions, however, will also be borne by Russian civilians as Moscow potentially stands at the brink of an economic collapse.

From closing airspace for Russian aircraft, sanctioning billionaires part of Mr Putin's inner circle, to banning Russian banks from the Swift banking system, the West has gone to monumental lengths to show its teeth.

The US, EU, UK, Australia, Canada, Japan and – in an unprecedented move – Singapore and South Korea unveiled sanctions to punish an unrelenting Russia.

Traditionally neutral Switzerland said it will adopt all the sanctions already imposed by the EU on Russia and Mr Putin.

Economy

The Russian rouble plummeted to a record low of about 30 per cent against the American dollar on Monday after Mr Putin put nuclear-armed forces on high alert. A weaker ruble is likely to cause a surge in inflation, forcing the standard of living for an average Russian to drop.

Russians were reportedly seen rushing to banks and ATMs to withdraw money amid an emerging economic crisis.

The US on Monday blocked Americans from engaging in any transactions involving Russia’s central bank, which means the bank won’t be able to carry out any transactions in dollars or access its reserves in dollars.

A treasury department statement said the move will “disrupt Russia’s attempts to prop up its rapidly depreciating currency by restricting global supplies of the rouble and access to reserves that Russia may try to exchange to support the rouble”.

The bank of Japan announced it would freeze Russia’s yen-denominated foreign reserves in cooperation with G7 countries’ efforts to ramp up sanctions.

To stop the rouble from plunging further, the Russian president banned citizens from transferring money abroad, while the Russian central bank hiked interest rates to 20 per cent from 9.5 per cent.

The bank has also temporarily suspended the sale of securities held by foreigners.

Cost of living

Given Russia's reliance on the west for the import of consumer goods, including food and chemicals, the sanctions would also end up hurting the country’s middle-class citizens as the price of everyday goods is likely to shoot up.

Prices of electronic goods such as iPhones, computers and gaming consoles like the PlayStation, which Russia relies on the west for import, are also likely to skyrocket.

Foreign travel would become expensive along with foreign services such as Netflix.

Russian exports of all commodities from oil and metals to grains would also be disrupted by the sanctions. Meanwhile, Brent crude surged past $104 a barrel following Moscow's declaration of war.

“While trying to exempt energy transactions, Swift can still cause significant disruption to energy trade flows in the near term, at least until buyers switch to alternatives like Telex or other systems. On other commodities - I can’t see how trade continues without the exemptions," Amrita Sen, co-founder of the Energy Aspects think tank, told Reuters.

Sports

The international sporting community has reacted sharply against Mr Putin's aggression by barring Russia from forthcoming events. These sporting sanctions have left several athletes in a lurch.

Russia has been expelled from the 2022 World Cup and its teams have been suspended from all international football competitions “until further notice”, FIFA announced.

The International Olympic Committee (IOC) has asked the international sports federation to boycott Russian and Belarusian athletes from participating in their events to “protect the integrity of global sports competitions”.

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