Interesting development. Fox is reporting that the Trump Government has imposed a significant change to a sanction on Russia (as leverage in negotiations) zthat few people understand, but that could actually have a substantial impact on Russian monetary liquidity.
USA
has banned all foreign companies (under the penalty of sanction) from paying for any and all Russian energy resources through a Russian bank that is currently sanctioned.
What does that mean?
European, Indian and Chinese energy importers will now have to decide if they want to face sanction themselves by continuing pay for their energy purchases through sanctioned Russian banks, or instead, use only the Russian Banks that remain off the sanction list.
What impact could this have?
Russia's biggest banks, such as Sberbank, Gazprombank, Alpha Bank are all on USA's sanctioned list. Therefore, if huge energy importers choose not use their services under threat of sanction, it will eventually cause a massive foreign liquidity problem inside those banks. The Russian Ruble isn't worth anything. Russia demands USD, Yuan and Euros for energy payment because it needs those strong currencies flowing through their economy for the ability make international purchases. This sanction will slowly dry up the amount of foreign currency in Russia's big banks, deeply damaging Russia and the bank's ability to loan the Kremlin money to fund the war.
Of course, some companies (particularly in India) might choose to ignore the sanction, but others (especially the Europeans) won't want to risk their own business due to sanctions and will almost certainly stop injecting money into Russia's big banks.
These are the kind of boring, seemingly benign sanctions, that will slowly choke a Russian economy that is already being propped up by interest rates in the 17-21% range, while Russians are facing consistent 13-15% year-over-year inflation. The Kremlin is already taking on debt that will require insane levels of repayment due interest, but they're also setting the Russian people to deal with a generation's worth of crippling costs that will have them fall even further behind their Western counterparts. Watching the people of Russia have to quietly suffer from an enormous vacuum in their purchasing power, warms my heart.
announced a new military aid package for Ukraine today, valued at $300 million usd. The contents of the package include the following:
