Russia’s weak spot: the financial sanctions are working
Russia’s weak spot: the financial sanctions are working

Author(s): Iwona Wiśniewska, Maciej Kalwasiński
Subject(s): Politics, Geopolitics
Published by: OSW Ośrodek Studiów Wschodnich im. Marka Karpia
Keywords: Russia; financial sanctions
Summary/Abstract: Since December 2023, the US administration has been increasing its pressure on Russia’s financial sector and its foreign partners. This has made it progressively more difficult for the Russian Federation to pay for imported goods and services. Reports from Russian media and businesses also indicate that several Chinese banks have ceased their cooperation with Russia due to concerns over US secondary sanctions. Nonetheless, these challenges have not yet led to any significant alterations to Russia’s foreign trade. According to the Central Bank of Russia (CBR), in the first eight months of 2024, the value of imports fell by approximately 8% year-on-year, while exports declined by more than 1%. This relatively modest reduction suggests that Russian entities, in collaboration with their foreign partners, particularly those in the Global South, continue to find ways to circumvent the sanctions. However, the costs of importing goods are increasing and delivery times are lengthening. Consequently, inflation continues to rise, further exacerbating Russia’s economic woes.

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