Some experts say that Western sanctions are likely to bring Russia and China closer together economically—and that they may pose a threat to the U.S. dollar’s dominance of the global financial system
financial institutions in more than 200 countries and facilitates the majority of global money transfers. It’s the lubricant of international trade and finance. Without it, moving money is slower and more expensive. “This will ensure that these banks are disconnected from the international financial system and harm their ability to operate globally,”It could also have an unintended consequence.
“For an economy such as Russia that still relies a great deal on export revenues and on international trade more broadly, losing access to global finance is clearly a painful blow,” says, a professor of economics and trade policy at Cornell University and the former head of the IMF’s China Division. There has been some debate on whether Moscow will resort to cryptocurrencies to circumvent sanctions. But for now, Prasad says “The restrictions on Russia’s access from the Western-dominated global financial system will undoubtedly drive it into a deeper economic embrace with China, in terms of both trade and financial dependence.”
After traveling on a new route from China, a container train carrying food and medical supplies from Shandong province arrives at Terminal Selyatino, outside Moscow, on Feb. 20, 2022.
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