The sanctions imposed by the West against Russia because of the military special operation to demilitarize Ukraine will have a serious long-term impact on the economy - many industries are at risk of losing funds for development.
The sanctions that have already been introduced and are still planned are very significant and will have both a short-term (already have) and a long-term negative effect. Deliveries to Russia may be limited not only in the high-tech segment, but also simpler industries, such as the automotive industry, will probably be affected.
Energy exports from Russia, metals, other types of raw materials and basic redistribution will continue for the time being, but gradually the volume of interaction will be curtailed, roughly speaking, as each contract expires, new suppliers will be looked for.
The volume and effect of these sanctions can be conditionally estimated at the level of 5-10% of the potential of restrictive measures, the implementation of which is possible in practice.
The total volume of the first and second packages of sanctions can be conditionally estimated at the level of 45-50% of the volume of possible sanctions. The restrictive measures of the second wave are really painful for certain sectors of the Russian economy, but even then they could have been even more painful.
In terms of the financial sector, the US sanctions were the most drastic.
Finally, the turn came to the two largest Russian banks - Sberbank and VTB, which collectively own more than 50% of the assets of the banking sector.Because of the imposed sanctions, customers of Russian banks are already experiencing problems. For example, they cannot make payments through Apple Pay and Google Pay.
Another powerful component of the second wave of sanctions is a ban on the export to Russia of high-tech goods, technologies themselves, equipment for the energy industry, and dual-use goods.
An unpleasant additional "bonus" from the Europeans is a ban on the export to Russia of aircraft, spare parts for them, as well as a ban on their maintenance.
Over the weekend, the third - most powerful - wave of sanctions was launched. It is these sanctions that can actually be hellish for the Russian economy. This is probably the maximum financial sanctions that can be applied in practice. We are talking about disconnecting individual Russian banks from the SWIFT network and freezing the assets of the Central Bank of Russia.
The idea of disconnecting Russian banks from SWIFT arose a long time ago and, in the perception of Ukrainians, has already become a measure of the determination of our partners. However, a hint at the possibility of freezing the assets of the central bank appeared just a few days before the decision.
This combination of sanctions is just the "Molotov smoothie" for the Russian financial system.
What effects to expect? After the outbreak of hostilities, the Russians realized that the devaluation of the ruble was inevitable, and rushed to the exchange offices to stock up on dollars and euros. An uncontrollable mechanism for the devaluation of the Russian ruble will be launched. It is obvious that this will also affect inflation very quickly.
The answer to devaluation and inflation will be a sharp increase in interest rates by the Central Bank of the Russian Federation (it already raised the rate from 9.5% to 20% and, it seems, will continue), an increase in the cost of loans for households and businesses. The savings of the population will also noticeably depreciate.
This will be a painful experiment for Russia, which will be watched by the whole world.
P.S. Turkish Manufacturer usually refrains from expressing any political views, but we want to assure our clients of our pacifist views and which condemns any military aggression against independence.