The International Monetary Fund (IMF) says the various sanctions on Russia will have an impact on the global economy and financial markets, with significant spillovers to other countries.
In IMF Article IV Consultation on Ukraine released yesterday, IMF Managing Director Kristalina Georgieva, revealed that in many countries, the crisis is creating an adverse shock to both inflation and activity, amid already elevated price pressures.
The sanctions against the Central Bank of the Russian Federation will severely restrict its access to international reserves to support its currency and financial system.
International sanctions on Russia’s banking system and the exclusion of several banks from SWIFT have significantly disrupted Russia’s ability to receive payments for exports, pay for imports and engage in cross-border financial transactions.
Georgieva said although it is too early to foresee the full impact of these sanctions, we have already seen a sharp mark-down in asset prices as well as the ruble exchange rate.
She said that while the situation remains highly fluid and the outlook is subject to extraordinary uncertainty, the economic consequences are already very serious, adding that energy and commodity prices – including wheat and other grains – have surged.
