Monday, March 07, 2022

Ukraine: March 7



As Russia’s isolation grows, China hints at limits of friendship Chinese state-owned financial institutions have been quietly distancing themselves from Russia’s beleaguered economy. ......... a careful balancing act by Beijing as it seeks to buttress ties with Moscow without openly violating sanctions, which could jeopardise its access to key Western export markets and the US dollar-centric international financial system. ..... a careful balancing act by Beijing as it seeks to buttress ties with Moscow without openly violating sanctions, which could jeopardise its access to key Western export markets and the US dollar-centric international financial system. ....... a careful balancing act by Beijing as it seeks to buttress ties with Moscow without openly violating sanctions, which could jeopardise its access to key Western export markets and the US dollar-centric international financial system. ........ expected Beijing to comply with US sanctions while continuing to support the Russian economy through the Chinese financial system. ....... “Even European banks can still finance energy imports, so why would Chinese banks not do it if European banks are going to do it, at least so far?” ...... China’s trade with Russia rose to $146.9bn in 2021, according to Chinese customs data. Although up 36 percent year-on-year, that figure still remains only about one-tenth of the volume of the China’s combined trade with the US and EU. ........ The Russian rouble plunged to a record low against the dollar on Monday, sinking as much as 30 percent in Asian trading, fueling expectations of a run on Russian banks. ........ China would be cautious about any action that could threaten its access to the international financial system. ........ China’s foreign exchange reserves fell around $28bn to $3.22 trillion in January this year. China also relies heavily on the SWIFT system. ........ Beijing’s moves to distance itself from Moscow appeared mostly symbolic, inflicting little actual pain on the Russian economy. ...... Beijing could find its balancing act harder to maintain if the US and its allies were to push for more severe sanctions down the track. Although expected to deal a significant blow to Russia’s economy, the sanctions blitz has largely spared the country’s lucrative energy industry due to fears of collateral damage to Western countries. Russia, the world’s third-largest oil producer and the second-largest producer of natural gas, provides about 40 percent of Europe’s supply of natural gas. ............ the pressure campaign could prompt ostracised countries to seek to “reduce dollar dependency and establish more cross-border payment systems”. .

. ‘The damage is done’: Russians face economic point of no return Shoppers and business people express despair and disillusion as sanctions cause run on rouble ........ ‘We have no clue what Putin will do next,’ said one business owner. ‘No one in the business community has a clue any more.’ ......... As markets opened in a panic on Monday, many Russians rushed to local cashpoints in Moscow to retrieve their savings before the damage got any worse. .......

Yesterday [the rate] was 80 [to the dollar]. Today it’s 100. Or 150.”

.......... “I just made a spontaneous decision today that I would ask [out of work] and go around until I took out all my money,” he said. “Before it was worth zero.” ....... “Who needs roubles?” one woman said sarcastically as she walked away. ........ There were signs that something extraordinary was taking place: the Moscow Exchange, Russia’s largest stock market, has halted trading until 5 March. ........ at the Metropolis Mall in Moscow, where there were signs that Russians were rushing to turn their cash into consumer goods before prices leapt up. ......... Several owners of mid-sized companies said that the invasion and subsequent isolation of Russia had made their businesses unprofitable overnight. ........ “I’m going to tell them that we are going into a crisis that we have never experienced before,” he said. “It’s like flying on a plane with no engines or the engines are on fire.” ......... “We have no fucking clue what he will do next,” he said. “No one in the business community has a clue any more. Everyone is so depressed. I have experienced so many economic crises here, the pandemic being the latest. “But there was always a reason to keep on fighting for your business,” he said. “Now, I don’t see the light at the end of the tunnel any more. Even if peace is achieved, the damage is done. How do we reverse it?” .......... Even top Russian business people, including the powerful oligarchs, appeared to be unsettled by the instability ushered in by the invasion, as well as the extraordinary measures being taken to prop up the rouble. ......... “We have left communism 30 years ago, we got accustomed to having a lot of comforts that are also seen in the West. All of that progress can be gone. We are no longer a member of the international community.” .

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