US Considers Sanctions on Russian Central Bank... Also Contemplates SWIFT Exclusion Option

[Image source=AP Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] On the 26th (local time), the Biden administration in the United States is considering strong sanctions against the Russian central bank and exclusion from the international financial messaging network (SWIFT) as Russia advanced to the Ukrainian capital Kyiv.

According to Bloomberg News and CNN, the Biden administration is discussing sanctions on the Russian central bank to prevent further Russian invasion of Ukraine. Previously, the U.S. Treasury Department sanctioned the central banks of Iran and Venezuela, but there is no precedent for sanctioning a central bank of Russia's economic scale.

Bloomberg News reported, "This measure targets the $643 billion (approximately 774.5 trillion KRW) reserves Russia accumulated before invading Ukraine," and said that simultaneous implementation with Europe is being pursued to maximize effectiveness. As of the end of June last year, the Russian central bank held 16.4% of its total assets in U.S. dollars and 32.2% in euros.

President Biden is also placing weight on the option of excluding Russia from SWIFT. If excluded from SWIFT, which is used by more than 11,000 major banks and financial institutions worldwide, it would effectively expel Russia from the international financial network. However, the U.S. has previously postponed this card as a "last resort" due to opposition from some European countries, including Germany.

Russia is the world's 12th largest economy. Western companies trading with Russia will inevitably be affected. Western banks face the risk of not being able to properly recover funds lent to Russia. Earlier, German Chancellor Olaf Scholz and others expressed opposition to SWIFT exclusion under the pretext of it being a "last resort."

During a public speech announcing the second round of sanctions, President Biden responded to a question about whether SWIFT was mentioned in the sanctions plan by saying, "Some European countries do not want it at this time." However, he added, "It is always an option."

The U.S. Department of Defense estimates that more than 50% of Russian forces have been deployed in this invasion of Ukraine. They have currently advanced to within 30 km of the capital Kyiv, and some military reconnaissance units have already entered Kyiv. A U.S. Department of Defense official said at a briefing that "Russia has launched more than 250 missiles at Ukraine, most of which are short-range ballistic missiles," and added, "Ukraine's self-defense is desperate, causing Russian forces to hesitate."

Meanwhile, the U.S. announced an additional $350 million (approximately 421.5 billion KRW) in support to Ukraine on the same day. U.S. Secretary of State Antony Blinken stated in a press release, "We have approved unprecedented additional support as Ukraine fights Russia's brutal and unjustified attack with courage and pride," and said, "This support will provide additional help to defend against the military threats Ukraine currently faces."

This content was produced with the assistance of AI translation services.