The effort comes as the initial impact of unexpectedly tough sanctions on Russian banks, oligarchs and companies begins to wear off somewhat
Senior U.S. officials fanned out this week to press world leaders to keep piling pressure on Moscow or join the campaign of sanctions and other measures, as the war in Ukraine enters its fifth week and the initial economic shock to Russia seems to be ebbing.
Deputy Treasury Secretary Wally Adeyemo met with senior officials in London, Brussels and Paris, and will finish the week in Berlin; the deputy national security adviser for international economics, Daleep Singh, pressed Indian officials in New Delhi, and Secretary of State Antony Blinken discussed the Ukraine war with Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed al-Nahyan in Morocco.
The effort comes as the initial impact of unexpectedly tough sanctions on Russian banks, oligarchs and companies begins to wear off somewhat, and the United States considers its next economic steps to isolate Russian President Vladimir Putin.
Within days of cutting off key Russian banks from the international SWIFT financial transactions network and immobilizing the bulk of the Russian central bank’s $630 billion foreign exchange war chest, the rouble lost half its value, prompting U.S. officials to declare that Moscow was battling a financial crisis.
But a month later, the rouble has largely recovered to its level just before the invasion, propped up partly by Russian capital controls, government orders for export firms to sell foreign currency and companies gathering funds to make quarter-end tax payments. Shares on Russia’s stock market are trading again, although they have dropped in value.
Russian bank VTB, a principal sanctions target, remains open for business in Europe, where it has gathered billions of euros in deposits, mainly from German savers. Other Russian banks are considering China’s UnionPay credit card system after Visa and Mastercard suspended Russian operations.
And the sanctions thus far have left Russia’s biggest economic lifeline untouched – energy sales to Europe, which could be up to 500 million euros ($555 million) a day at current prices. Russia is demanding payments in roubles for gas starting on Friday, which could boost the currency further.
The Biden administration is making sure European allies are firmly aligned on punishing Putin, while working to sway leaders who have sat on the sidelines as the war stretches on, officials say.
We’ve got to continue to raise pressure on Russia and increase our support for Ukraine, one senior U.S. official said, speaking on condition of anonymity. This is a challenge that is facing the free world and all democratic nations. And we need to be prepared for it to last a long time.