The G7 countries, which met in Brussels on March 24, have no doubts: they intend to restore peace, and for this it is necessary to increase economic pressure on Russia again. so that even Moscow’s gold, at the suggestion of the United States, is the target of the sanctions of the West, which also issues a warning to China: We call on all countries not to provide Russia with military or other assistance in order to continue to contribute its aggression in the Ukraine, read the joint statement released at the end of the meeting.
Stop trading Russian gold
Some US government sources have estimated that Russia’s gold reserves are worth between $100 billion and $140 billion. Its volume has increased about sixfold since the mid2000s, according to Bloomberg. The hypothesis that the Central Bank of Russia intended to use gold to support the ruble. But the G7 (Canada, France, Germany, Japan, Italy, the UK and the US) and the European Union have announced severe consequences will follow if gold transactions are intercepted by the Central Bank of Russia. A White House statement also reports that leaders of the G7 and the European Union will continue to work together to limit Russia’s ability to use its international reserves to support Russia’s economy and fund Putin’s war. The President of the European Commission, Ursula von der Leyen, said the same: We, the partners of the G7, are determined to further target our sanctions against Russia and to ensure that they are strictly enforced. We will exhaust the resources that Putin used to finance his war, we will not allow any circumvention. And we are ready to take further action.
Moscow’s hunt for foreign exchange reserves
With gold reserves frozen, it becomes imperative for Moscow to try to circumvent the economic blockade the West has erected around it and save the ruble and the Russian economy itself from isolation. After Western countries were asked to pay for gas and oil in rubles, Russia has also opened up to payment of goods in Bitcoin, but only for friendly countries. The BBC quotes the head of the Duma’s energy commission, Pavel Zavalny, as saying friendly countries could also be allowed to pay in their local currency and mentioning China and Turkey among the countries not involved in pushing the sanctions. Moscow famously wants enemy countries to buy gas and oil in rubles, a decision aimed at strengthening Russia’s currency, which has already lost more than 20% of its value since the beginning of the year.
The Russian View to the East
The sanctions currently in place prevent Russia from doing business with any Western country, which from now on will also prevent any form of purchase, even indirectly, of gold bullion from Russia. The only alternative for Putin may be to turn east and negotiate with the central banks of China and India. But according to Bloomberg, the main goal of the warning issued after the G7 meeting to countries wanting to help Moscow is to shut down any deals between Russia and Beijing that risk being the subject of economic sanctions. The Russians must know that we have nothing against them reads the statement after the G7 ; the Russian President, his government and his supporters, including the Lukashenko regime in Belarus, who are forcing this war and its aftermath on the Russians.
US penalties
Meanwhile, the United States has announced a new set of punitive measures against those who played key roles in the aggression against Ukraine, including 48 defense contractors that produced the weapons used in the invasion, up to 328 Duma deputies (Chamber of the Federal Assembly of the Russian Federation) who supported the Kremlin by approving the treaties on the independence of the selfproclaimed separatist republics of Donetsk and Lugansk, and key oligarchs of Russian finance. Russia’s exclusion from the G20 is also being discussed, as US President Joe Biden pointed out: I raised the possibility, which I support, but the decision depends on the G20 members. If Indonesia (which will host the October summit, ed.) does not agree, we will ask Ukraine to attend future meetings.