Economic sanctions push Russia out of SWIFT? Academics point to key reasons

After Russia’s full-scale attack on Ukraine, Western countries have successively imposed economic sanctions, but they are relatively conservative about whether to expel Russia from SWIFT. Scholars from the Taiwan Academy of Economics pointed out the key reasons, pointing out that in order to avoid chaos in the political and economic order, the possibility of expelling Russia from SWIFT is extremely low.

The Society for Worldwide Interbank Financial Telecommunication (SWIFT) payment system was originally intended to replace telex, and today more than 11,000 financial institutions use SWIFT to send secure messages and payment instructions. With no other world-recognized alternative, SWIFT remains the most important conduit for global financial transactions.

Russia’s expulsion from SWIFT would mean that it would be almost impossible for financial institutions to send money in or out of the country, which would be a sudden blow for Russian companies and their foreign customers, especially those who buy oil and gas from Russia and sell them in U.S. dollars. priced buyers.

The Taiwan Academy of Economics held a press conference today, during which they also expressed their views on this issue. Wu Mengdao, director of the Taiwan Academy of Economics, pointed out that US President Joe Biden announced new sanctions against Russia today, but mentioned that the current series of sanctions against Russia did not include a ban on Russia’s use of SWIFT.

“If Russia is really eliminated, the financial market will be in chaos.” Wu Mengdao said that when it is impossible to operate under SWIFT, even if an order can be placed, there is no way to actually execute the transaction; although Russia is trying to de-dollarize, 80% of the main external commodity transactions are Still US dollar transactions.

Wu Mengdao explained that the expulsion of Russia from SWIFT will have a considerable impact on the Russian economy, but this is also the reason why Germany does not want to do this, because Germany and Russia have relatively large trade exchanges in energy, considering the international economic and trade order, wars Shouldn’t escalate to this level.

“U.S. inflation figures are usually inverse to the support of the U.S. president.” Sun Mingde, director of the Economic Prediction Center of the Taiwan Academy of Economic Sciences, pointed out another reason. U.S. oil prices account for a very high proportion of consumer price inflation (CPI). That is to say, oil prices soared. A rise would be detrimental to the US President’s approval ratings.

Based on the above factors, Sun Mingde believes that electricity prices and natural gas have risen sharply in Europe last year. If the economic order is in chaos due to sanctions and energy prices soar, European economic growth will be hit, and the United States is not happy with such a situation. Therefore, most of the international consensus is It is to use “precision strikes” and try not to hurt yourself.

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