Vladimir Putin is wreaking havoc in Ukraine and sending tremors of angst throughout the world. While many fear what’s to come, the current sanctions imposed on Russia have their own repercussions.
Western allies are closely watching every move that the Russian president makes, anticipating his next steps and deliberating how they can deter him from making more reckless decisions that have sadly impacted millions of people.
The biggest sanction on Russia’s central bank was stopping the usage of $630 billion of reserves. Access to foreign exchange markets has been cut making it extremely difficult to support the Russian currency. The Russian central bank has since doubled the inflation rate to more than 20% and it’s likely that the Russian economy will collapse even further as this is the first time a bank of the G20 has been targeted in such a way.
The aim of targeting the Russian central bank is to destabilize the financial system and deter Vladimir Putin from taking such action on other countries in the future. Many hope that the sanctions can be used in negotiations to encourage de-escalation by Russia should the sanctions be withdrawn.
Numerous international companies have pulled out of Russia leaving many people jobless. Even local non-essential businesses are experiencing dire times as many of their customers can no longer afford their services due to the dramatic increase in the cost of everyday items.
Prior to McDonalds closing its 847 restaurants throughout Russia, many people purchased the remaining food only to resell it at a much higher price, sometimes even up to 10x the original price. Local food stores have also had to put restrictions in place in terms of how much food people could purchase as many anxious individuals were panic buying leaving shelves empty. Medicine has also been quite challenging to come by, sanctions have not stopped Russians from receiving medication but shipping has been delayed due to the lack of transportation.
Western governments hope that the sanctions and their repercussions will encourage the people of Russia to stand up to their president despite their fear of the risks that come with doing so and eventually in time, Vladimir Putin will be removed from power.