Russia’s invasion in Ukraine is one of the most talked about events of the past few months. It’s caused volatility in cryptocurrency, changes in the global economy at large, and spurred many humanitarian efforts. One of the strongest set of responses to the invasion has come from the U.S.
The U.S has used several sanctions against Russia. The most drastic being the complete ban of any Russian oil importation. This has led to record high gas prices in the U.S due to the fact that Russia is the second largest crude oil producer in the world. The U.S has also severely restricted the purchase of Russian bonds and almost all interactions with the USD.
Several countries have followed in the U.S’s footsteps. The U.K pledging to stop all oil importation and the U.N actively considering proposals on the matter. Beyond this SWIFT, the largest cooperative for international bank trade, removed Russia, making it much harder for Russia to trade outside their own borders. And finally, almost half of Russia’s $630 billion in reserves were frozen in foreign countries, a giant loss.
This has all served as a projected 15% squeeze and reduction on the Russian economy. Russia, in response, has implemented policies to stabilize, a big increase in interest rates and reduction in the use of USD for example, although the drop is still sizable. How Russia will react as more time passes is still yet to be seen.
Notably, effects are felt even outside of Russia. The stock market hitting harsh lows and gas prices high highs in the U.S as well as the price of gold skyrocketing, not a good sign when it comes to the global economy. Companies are also universally suspending operations within Russia, something important for both the companies and Russia itself.
The western world has dedicated itself to showing its disapproval of the Russian invasion. How Russia will react as the pressure mounts and how the rest of the world will react as the global economy plummets is still up in the air. Undeniably though, the war in Ukraine is prompting big changes.