The leaders of the Group of Seven countries — the United States, the United Kingdom, Canada, France, Germany, Italy, and Japan — declared on Thursday that they are banning the use of gold by the Russian Central Bank in its interactions with the international financial system. In addition to this, the Biden administration issued a fresh round of penalties on the Russian Federation.
A previous study found that sanctions on Russia’s ruling class, the country’s Central Bank, and President Putin had little effect on the country’s gold reserves. Russia has spent years amassing the world’s fifth-largest gold reserve, and it is now being targeted because sales of the precious metal might help to stabilise the rouble, which has plummeted as global economies isolate Russia as a result of the country’s invasion of Ukraine. According to official estimates, Russia has around $130 billion in gold reserves, and the Bank of Russia declared on February 28 that it will begin purchasing gold on the domestic precious metals market. According to the White House, the G7’s decision would limit Russia’s ability to utilise its overseas reserves to support the country’s economy.
Almost the entire Russian parliament (Duma), as well as sections of the country’s defence establishment, banking sector, and oil companies were sanctioned on Thursday by the United States, which pledged to hold those responsible for what it called “an unconscionable war of choice against Ukraine and its people” to account. The Biden administration also announced that it will provide an extra $800 million in security support to Ukraine amid allegations of a Russian quagmire and a Kyiv retaliation, increasing the total amount of US security assistance promised to Ukraine in only the previous two weeks to $1 billion.
In response to criticism from the Ukrainian diaspora and constituent pressure on lawmakers that the United States is doing nothing to alleviate the humanitarian crisis, the administration announced that the United States will admit one hundred thousand thousand Ukrainian refugees into the country in the coming months.
US Secretary of State Antony Blinken cited as justification for the sanctions the members of Russia’s state Duma who “support Kremlin’s violations of Ukraine’s sovereignty and territorial integrity, including through treaties recognising the self-proclaimed independence of Russian-proxy controlled areas of eastern Ukraine, the so-called Donetsk People’s Republic (DNR) and the Luhansk People’s Republic (LNR).” The United States, according to Blinken, is “taking steps to impose extra significant costs on Russia’s defence establishment… including the designation of various defense-related businesses.”
According to the US Treasury, Washington’s move was consistent with comparable steps taken by the European Union, the United Kingdom, and Canada. In the wake of scathing condemnation from Kyiv’s embattled leadership, the United States, the European Union, and the Group of Seven countries responded together, accusing Europe of “handing over cash for Russian oil and gas” and effectively backing the war against the country. In the short term, it is unclear what impact the sanctions would have on India, which is a major consumer of Russian military gear. Blinken, on the other hand, believes that shutting off dozens of Russian military enterprises from the US financial system would have a profound and long-lasting impact on the country’s defense-industrial foundation in the long run. His warning was clear: “We are targeting, and we will continue to target, the providers of Russia’s military effort and, therefore, their supply chain.”
President Barack Obama has promised to “impose costs until President Putin ends this unprovoked war against Ukraine,” and Blinken has called on those close to Russian President Vladimir V. Putin to stop supporting him and publicly condemn the cold-blooded war, which he says has resulted in the unconscionable deaths of hundreds, including children, and the largest humanitarian catastrophe in Europe since World War II.