Amidst the ongoing American Sanctions On Russia; President Vladimir Putin’s endeavor to “diminish reliance” on the US dollar in international trade — encounters new hurdles.
Russia’s Inimical Move Led To The “American Sanctions On Russia”
The American Sanctions On Russia: part of Western measures in response to Russia’s actions in the geopolitical dimension. Russia’s inimical move that led to the “American Sanctions On Russia” includes its invasion of Ukraine. The ramifications of Russia’s errors? Apart from the ensuing “American Sanctions On Russia” it also significantly isolated Russia’s financial system from other nations.
See reference here: THE NEWSWEEK
As a result; the Kremlin’s capacity to conduct transactions using US dollars has been severely constrained (as part of “American Sanctions On Russia”). The circumscription (regarding the utilization of US dollars) on Russia poses formidable challenges to the Kremlin’s trade diversification strategy.
As a countermeasure to these American Sanctions On Russia, Putin has actively pursued alternative currency agreements with other giant countries [China and India]. The goal of the currency agreements between Russia and 2 big nations (as part of Russia’s “countermeasure” against American Sanctions On Russia) has been to “circumvent” the US dollar by conducting trade in “local currencies” — like the yuan and rupee.
American Sanctions On Russia: Russia’s Countermeasures — Backfiring!
However, recent developments suggest that this strategy of Russia to oppugn “American Sanctions On Russia” may be backfiring. One noteworthy consequence of Russia’s strategy is the accumulation of billions of rupees in Indian banks — due to restrictions by the Reserve Bank of India.
As a corollary, this prohibits Russian companies from “easily converting” these funds into rubles or… repatriating them to Russia. The Indian rupee’s “limited convertibility” and concerns about “exchange rate stability” (in relation to the American Sanctions On Russia) further complicate things for Russia.
See reference here: THE HERALD ONLINE
The outcome of Russia’s challenges (particularly the American Sanctions On Russia) is a substantial amount of “frozen funds” — potentially amounting to tens of billions of dollars.
These Russian financial impasses [attributed to the American Sanctions On Russia] have far-reaching implications including… “potential impacts” on the exchange rates and the stability of the Russian ruble.