- Russia faces intense pressure from sanctions targeting its payments systems.
- Russia’s top banker said the country should stop discussing its payments mechanism because it is a sensitive issue.
- Russia is exploring alternatives to the Western payment system, recognizing that this will be a challenge and will take time.
Russia’s chief financial officers acknowledged that the country is under immense pressure from sanctions as trade payments are increasingly cut off.
Reuters reported on Wednesday that a top Russian banker said the methods were so sensitive they should be considered a “state secret.”
“Right now I can clearly see a second secretary sitting somewhere in the U.S. embassy writing down all our official statements. Maybe he’s sitting here too,” said Andrey Kostin, CEO of VTB Bank, Russia’s second-largest bank.
“Whatever steps we take, we’re seeing a very rapid response,” he said.
Kostin made the remarks at a financial conference where he was taking part in a panel discussion alongside Russian Central Bank Governor Elvira Nabiullina.
Nabiullina agreed with Kostin that it would be best to avoid details about how the payments would work.
He also acknowledged that Russia’s business partners abroad are under “tremendous pressure” from Western sanctions, but said he hoped that an alternative international payment system would emerge that doesn’t involve Western institutions.
“Various alternatives are being discussed. Companies are becoming very flexible, very enterprising. They find ways to solve this problem and often do not share them with us,” Nabiullina told Reuters.
Western-led sanctions against Russia are intensifying
Despite tough Western sanctions over its invasion of Ukraine, Russia’s economy has remained buoyant thanks to its wartime activities.
Russia’s war-driven economy is doing so well that the World Bank recently upgraded Russia to a “high-income” country.
West Partial blockade of Russian banks Early in the war, funds were stolen through the SWIFT messaging system, a system widely used for payments, but Russia and its trading partners were able to circumvent the sanctions by using smaller banks and other payment methods.
However, the United States and its allies have stepped up restrictions, particularly through the use of secondary sanctions against entities in third countries.
Last month, the U.S. Treasury Department announced a new package. Broad US sanctions Pressure on Russia has grown, forcing Russia’s main stock exchange, the Moscow Exchange, to suspend trading in dollars and euros.
Russia said it was working with a group of countries to create a platform that doesn’t require dollars.
Nabiullina said discussions about the platform were ongoing but would be difficult and time-consuming.
