The current situation in the financial markets is “calming down” due to the imposition of sanctions, and the long-term consequences of the restrictive measures being introduced are coming to the fore, Economic Development Minister Maxim Reshetnikov said during a government meeting on the situation in the economy. The ministry has created a group of experts to analyze the sanctions documents – while the entire package of documents has not been published, and there are discrepancies in those already posted, the minister specified.
One way or another, it is already possible to group the sanctions into three blocks: restricting Russia’s access to world financial markets, restricting technology imports and curbing the country’s integration into the world economy, Reshetnikov said.
The first group includes sanctions against public debt and major companies and banks. These restrictions should not become an obstacle to the functioning of the banking system, the minister noted. Russia has its own resources: the accumulated funds of enterprises – almost 40 trillion rubles, which grew last year due to an increase in company profits, as well as savings from the population.
“This is a good basis for continuing to finance not only the current activities of enterprises, but also investment projects that are currently being implemented,” Reshetnikov noted. Of particular importance is the balanced monetary policy of the Central Bank, including the stability of rates, as well as budgetary policy in terms of the rhythm of spending, the launch of project financing from the NWF, and regional budget loans, the minister stressed.
The second group is the restriction on technology imports to Russia. The United States plans to significantly limit access to technical solutions necessary not only for the defense industry, but also for strategic industries, Reshetnikov recalled. At the same time, there are no details yet, the ministry will analyze them. “It is already clear that this will put some pressure on the efficiency of investments, as technological restrictions will affect us,” he admitted. But at the same time, Russia has faced a number of restrictions on the supply of chips, engineering software and equipment for the electronics industry before, Reshetnikov added, recalling that import substitution is already in effect.
The third group – limiting Russia’s integration into the world economy – “this is the brightest moment,” the minister stressed. The presence on the markets of the USA, EU, Canada, Japan, Australia will be significantly complicated for a number of goods, the share of these countries in Russian exports was more than 50%, he added. At the same time, the energy sector is excluded from sanctions, so the share of export restrictions will be less. “The most noticeable blow was dealt to the Russian system of export support – non-commodity non-energy. First of all, this is due to the sanctions against VEB and the REC group,” Reshetnikov said.
It is necessary to adapt the system as soon as possible in order to maintain support tools for exporters – lending programs, insurance and subsidies, he said. In addition, work on the diversification of supplies to the markets of Asia, Africa, the Middle East, and the EAEU is acquiring special significance. Reshetnikov added that the industry continued to grow in January. In January, industrial production increased by 8.6% yoy compared to 6.1% in December.
Earlier, a representative of the Ministry of Economic Development told reporters that the ministry, together with interested departments, is preparing additional measures that will help reduce the impact of sanctions.
On the evening of February 24, tough sanctions against Russia were announced by the United States, Canada and the United Kingdom. According to a report published by the US Treasury, VTB, FC Otkritie, Novikombank and one private bank, Sovcombank, fell under blocking sanctions. This means freezing their US assets and banning all US companies from working with them. VTB came under similar sanctions from the UK.
The Bank of Russia and the government will provide any necessary support to banks that have fallen under the sanctions of Western states, a representative of the regulator said.
Earlier, the United States introduced measures against public debt, development institutions, in particular VEB.RF, which unites them, a number of Russian commercial banks, the Nord Stream 2 gas pipeline, and some personalities.