Talk of New Sanctions on Russia Weighs Down the Euro
New sanctions against Russia may lead to further fall in the euro. France and Germany have both called for new sanctions against Moscow. French President Emmanuel Macron called for a full asset freeze on Russian banks. German Defense Minister Christine Lambrecht said the European Union should talk about banning gas imports from Russia. The EU currently imports 40% of its gas needs from Russia. The new measures would affect the prices of oil and gas in Europe.
The French President Emmanuel Macron has called for new sanctions against Russia after the Ukraine crisis. The Russian government has denied the accusations, saying it did not commit war crimes. Germany’s defense minister has called for the European Union to ban Russian fuel imports. The EU imports 40% of its fuel from Russia. However, this could cause major disruptions in energy supplies in Europe if more sanctions are imposed.
The EU has been working to shore up its economy by hiking interest rates in its currency. The central bank has also doubled its interest rate in an effort to stabilize the ruble. It has a huge stock of foreign reserves, including gold and foreign currencies, which were built up in order to fend off sanctions. Some of these assets are currently in bank accounts all over the world, making them more available to a wide range of countries.
The European Union has already imposed new sanctions on Russia, preventing it from using the SWIFT international payments system. The European Union has also barred the Bank of Russian from using its international reserves. As a result, the currency has suffered. Further, a number of Russian oligarchs have been targeted by the new measures. The Kremlin’s chief investigator has ordered an investigation into the alleged “provocation” by Ukraine. The European economy is facing a severe crisis as more sanctions are imposed against the country.
Despite these new sanctions, the EU has already taken steps to bolster the economy and protect its currency. It has cut off its banks from SWIFT, which is an international payment system used by more than 11,000 banks. Further, the EU has also blocked Russian companies from using its own SWIFT-based systems. Further, the EU has cut off the country’s central bank from SWIFT, which is the main international payment system.
The euro is being weighed down by fears of the economic damage of the conflict in Ukraine. The currency is now parked at around $1.1009. The risk of a further drop in the euro is that more European nations will follow suit. The March Fed meeting minutes are due on Wednesday. Even more sanctions will likely drag down the euro. In the meantime, the dollar is expected to strengthen.