Block, Siteadmin, SkipCaptcha, Upload, Automoderated users, delete, edit, move, nsTeam2RO, nsTeam2RW, nsTeam2_talkRO, nsTeam2_talkRW, protect, rollback, Administrators, template
295,143
edits
Changes
Jump to navigation
Jump to search
Line 107:
Line 107: − + + + + + + + + +
→Foreign reserve holdings
====Foreign reserve holdings====
====Foreign reserve holdings====
Russia's foreign reserve holdings stood at a historic high of $643.2 billion on February 18, 2022 with roughly half held outside the country.
Russia's foreign reserve holdings stood at a historic high of $643.2 billion on February 18, 2022 with more than $300 billion, held outside the country.
Russia imported a lot of technology and other technologies from the Western economic sphere. To pay for these purchases, Russia has been forced to use Western-controlled currencies. Especially the [[dollar]] and the [[euro]]. By freezing these deposits, [[the West]] calculated that Russia wouldn’t be able to access these deposits, and thereby would lose a huge amount of money. This would hinder further Western imports into Russia.
However, the West did not anticipate that Russia has been preparing for import substitution since 2014. This preparation was one of the responsibilities of then prime minister [[Dimitry Medvedev]]. Russia prepared well and has been able to switch to indigenous products pretty quickly. What it couldn’t produce on its own, either due to technology or capacity, it procured from partners like China. Russia and China are able to trade outside of the Western system, using their own currencies. This is because Russia expected to be cut off from the [[SWIFT]] network, and trade in dollars and euros didn’t make much sense anymore.
Russia knew it would be cut off from the Western trade system and SWIFT. There was no point in maintaining these reserves in dollar and euro. However, getting rid of the money in advance would be suspicious. The solution was to buy most of the Western industrial assets in Russia. There were a lot of Western industrial enterprises in Russia before the NATO war in Ukraine. They invested in Russia’s economy by building factories and employing people.
Russian money deposited in the West is no longer usable by Russia (therefore the contingency plan), and Russia predicted that the West would be idiotic enough to freeze and confiscate it. The freeze bestowed a huge benefit to Russia and the [[multipolar]] world. It exposed the Western currencies as Western weapons that can be used against anyone in the multipolar world who doesn’t want to comply with the West’s “[[rules-based order]]”. The West-imposed freeze was the “kick-off” of the end of the [[petrodollar]] system.
====Forced default====
====Forced default====