G7 Leaders Decide To Ban Imports Of Russian Gold

by Swarajya Staff - Jun 27, 2022 12:57 PM +05:30 IST
G7 Leaders Decide To Ban Imports Of Russian Gold A worker removes gold ingots from moulds in Kasimov, Russia. | Source: Bloomberg

US President Joe Biden announced yesterday that the US and other members of the G7 will impose a ban on imports of Russian gold. This is part of an effort to impose cost on Vladimir Putin and Russia for the ongoing war in Ukraine.

The official ban will be announced on Tuesday.

This is significant because gold is Russia's second largest export. First being energy. It is a significant source of revenue for Russia. The move intends to isolate Russia's economy, away from the global economy,

According to America's secretary of state, Antony Blinken, Russia's gold exports account for around $19 billion of revenue per year.

As per a report from AP, Boris Johnson tweeted that the ban on Russian gold will “directly hit Russian oligarchs and strike at the heart of Putin’s war machine".

“We need to starve the Putin regime of its funding. The U.K. and our allies are doing just that," he added.

According to the latest data from the World Gold Council, with around a 10% slice of the globe’s output, Russia is world's second largest producer of gold.

Since Russia annexed Crimea in 2014, its holding of gold has tripled. The commodity is an important asset for Russia's central bank.

What impact are the western sanctions having?

Since the beginning of the war in Ukraine, the west has imposed an unprecedented level of sanctions on Russia.

Despite this fact, the Russian ruble actually hit its strongest level in seven years last week following a February collapse.

Russia’s ruble touched 52.3 to the dollar last week. The Ruble hasn't been this strong since 2015.

The Russians are, in fact, worried about Ruble's surge. Russia’s central bank is actively taking measures to try and weaken it.

Why? Well, the Russians fear that if the Ruble becomes too strong, it will make Russia's exports less competitive in the global markets.

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