The United States, Britain, Europe and Canada on Saturday (27/2) night agreed to block access Russia on SWIFTthe world’s largest payment system network.
This is the harshest sanctions imposed by western countries for Russia’s attacks on China Ukraine which has killed hundreds of civilians.
The sanctions are aimed at preventing Russian President Vladimir Putin from using the US$630 billion stored in foreign currency reserves and to further depreciate the ruble’s value.
“Putin’s administration has been kicked out of the international financial system,” said senior cabinet official Joe Biden in a statement.
Meanwhile, British PM Boris Johnson said that western countries will continue to work together to ensure Putin pays a heavy price for his aggression.
“Tonight we and our international partners have taken the decision to close Russia’s access to the global financial system, including taking the first important step of removing Russian banks from SWIFT,” Johnson said.
SWIFT or Society for Worldwide Interbank Financial Telecommunication is the safest messaging system that facilitates fast cross-border payments, which today makes world trade run smoothly.
Banks connected to the SWIFT system can use it to make payments with other banks.
Due to its security system, banks often process high volume transactions via SWIFT.
In 2020, around 38 million SWIFT ‘FIN messages’ are sent daily on the platform. Every year, trillions of dollars are also transferred using the system.
By being blocked from SWIFT, Russian companies and residents will find it difficult to pay for the goods they import, or receive payments for exported goods, or borrow and invest abroad.
(Reuters/vws)
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