Ukraine-Russia conflict: As war continues, here’s how ordinary Russians are being affected by sanctions

People stand in line to withdraw US dollars and Euros from an ATM in St Petersburg on February 25 2022

People stand in line to withdraw US dollars and Euros from an ATM in St. Petersburg on February 25, 2022.

Photo : AP

Moscow: As the Ukraine-Russia war continues, Western nations have imposed multiple rounds of sanctions against President Vladimir Putin as well as leading personalities and major institutions in the country. But with Russia paying no heed to the new curbs as it continues to intensify its attack, the sanctions appear to have created a unfortunate situation for citizens.

As the US, European Union and its allies put forth an ever-increasing list of sanctions, the economic fallout was visible almost immediately. With the Russian ruble clashing to record lows at the beginning of this week, alarmed citizens had formed lengthy queues at banks and ATMs on Monday. Many have found themselves unable to withdraw money, or have access to only Roubles.

Russians – no stranger to currency disasters in the post-Soviet era – now face the possibility of a drop in the standard of living, with prices for imported goods likely to skyrocket. This list can potentially range from fruits that do not grow locally to electronics and even foreign streaming services such as Netflix.

The general uncertainty caused by the war has caused the world oil price to surge above $100 a barrel, which means that ordinary Russians are likely to pay more for fuel and food in the months to come. About 66% of medicines are imported into the country, and it is not yet known if a mechanism will be created to enable Russians to pay for imports of medicines.

With the US freezing the assets of the Russian central bank in Western jurisdictions, many citizens and businesses will not be able to access foreign bank accounts that they have. The rush to withdraw money has been fueled by the fear of losing all savings, much like millions of Russians had seen happen in the 1990s. According to some reports, the Russian government has also contemplated the possibility of needing to seize 60 trillion rubles – the funds deposited by citizens – in case of an absolute blockade.

Following the sanctions, Putin had also announced emergency measures intended to prop up the ruble, including banning residents from transferring money abroad. Reports quoting citizens have also highlighted the unhappiness prompted by Russia’s central bank’s decision to sharply raise its key interest rate.

With several major Russian banks now cut off from the SWIFT financial system, Russians are also facing additional difficulties in making payments. With VTB (which handles card payments in Moscow’s metro, buses and trams) being one of the affected banks, locals are now facing problems in making digital payments for public transportation fares. Both Google and Apple have also limited their payment services in the country, adding to citizens’ woes.

A major part of the sanctions announced this week also focus on travel. With the US, Canada and European moving to block Russian planes from using their airspace, those looking to travel out of the country face new challenges. Russia has closed its airspace to airlines from the European Union and a string of other countries in response to sanctions, driving up ticket prices and severely limiting the population’s ability to travel.

Delivery services such as FedEx and UPS also recently announced that they were suspending deliveries to Russia.

Russia Faces Major Backlash From European Countries How Sanctions Would Impact Russia
Russia Faces Major Backlash From European Countries, How Sanctions Would Impact Russia?