this post was submitted on 12 Jun 2024
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The sanctions come as G7 leaders are preparing to gather soon in Italy for a summit where the top priorities will be boosting support for Ukraine and grinding down Russia’s war machine.

Archived version: https://archive.ph/qrIbC

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[–] BrikoX 6 points 5 months ago* (last edited 5 months ago) (1 children)

It might look not great at first look, but when you think about it, the same sanctions prevent them from using USD. So they are forced to trade in other currencies, which negates all the harm. Like trade with China in yuan or India in yuan (they used to use rupees, but it's also a weak currency).

[–] [email protected] 7 points 5 months ago* (last edited 5 months ago) (1 children)

I wanted to know if this claim that all harm is negated, if trade occurs in other currencies is true. I have no clue how currencies really work on a global scale, so I looked up an exchange chart.

To me, it looks like it is similar, just on a different scale. Can you explain what you mean, i.e. am I reading this wrong and how do I read it right?

[–] BrikoX 5 points 5 months ago (2 children)

They are not exchanging yuan into rubles. They are using their yuan reserves to buy from China/India and China/India is paying them in yuans for oil and gas, so they are getting restocked without need for exchange. Which has double benefit for China, since it's strengthening their currency and giving them very cheap below market value goods. They are theoretically losing cash since if they were able to sell at full market price they would get 4 times that, but it's not significant enough to hurt them too much. But that might change soon, since Russia is trying to make China pay full price without having any leverage.

The sanctions would have worked if they had nobody to trade with, but China/India won't pass an opportunity for cheap oil/gas, which they desperately require for their growth. Russia also have the 4th largest currency reserves in the world just for such occasion. Putin might be a war criminal, but he's not stupid.

It did have an impact on every day Russians, but even that Russia tried to minimize by keeping interest rates low at the start of the war/sanctions and strictly controlling the exchange of rubles into any other currency. Only now they increased them to stop bleeding cash, even if they can sustain it for longer.

But all of that can change on a dime, geopolitics is a hot mess. US trying to make friends with India now, so they maybe decide to pressure them to stop buying from Russia or China might get offended by recent Russia's demands for higher price and tries to put them in their place. Who the fuck knows.

[–] [email protected] 3 points 5 months ago

Which sucks in a different way because India's government has been steadily drifting towards some very popular fascism.

[–] [email protected] 1 points 5 months ago

Ah okay that makes sense, thanks for explaining!