Topic: Sanctions Against Russia
Risks of foreign borrowers not returning loans issued by Russia may easily increase due to Western sanctions, Russian Deputy Finance Minister Sergei Storchak said.© RIA Novosti. Anton Denisov
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MOSCOW, August 20 (RIA Novosti) – Risks of foreign borrowers not returning loans issued by Russia may easily increase due to Western sanctions, Russian Deputy Finance Minister Sergei Storchak said Wednesday.
"Sectorial sanctions, especially in those areas tied with international financial relations, of course are now being felt," Storchak said.
"Issues are also arising in the security of monetary transfers tied to servicing loans that we provided to foreign borrowers: all payments are channeled through inter-bank cooperation and it’s clear that cash in the sanctioned lists of institutes that we work with bring about concern. We are forced to think about the security of loans that we have issued and getting back those resources that were at one time issued to various borrowers in different countries in the world," he said.
The minister said the sanctions against Russia have had an indirect impact on its economy but are now starting to have direct effect on it, as concerns over the safety of revenues grows among Russian exporters. He said that the existing money transfer channels would remain safe.
The United States, the European Union and their allies introduced several rounds of targeted sanctions against Russian companies and individuals since Crimea’s reunification with Russia in March. In a more recent incident in July, the United States and the European Union introduced sectoral sanctions targeting Russia’s defense, energy and banking sectors.
The European Union officially barred Russia’s largest state-run banks – Sberbank, VTB, Gazprombank, Vnesheconombank and Rosselkhozbank – from raising finance on Western capital markets after the United States imposed sanctions against three major Russian banks – VTB Group, Bank of Moscow and Rosselkhozbank.
Foreign banks have tightened credit for all Russian companies, even those not featured in the sanctions, since then. Not a single dollar, euro or franc was lent to a Russian company in July, according to Bloomberg.
In response to Western sanctions, Russian President Vladimir Putin signed an order on economic measures to protect the country’s economic security. The decree banned the import of agricultural and food products from countries that imposed sanctions on Russia for one year.
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