Russia ‘preparing legal action’ to release $600 billion in foreign currency reserves | Ruble
Russia is preparing to take legal action to challenge the freezing of its $600billion (£462billion) foreign currency war chest put in place by Western governments after the invasion of Ukraine, a said the head of the country’s central bank.
Elvira Nabiullina said plans were underway to launch lawsuits after governments including the US, UK and EU froze Russian central bank foreign exchange reserves held in their jurisdictions.
“This freezing of gold and currency reserves was unprecedented, so we will work on legal claims, and we are preparing to present them,” Nabiullina was quoted as saying by the Kremlin-backed Tass news agency. .
“This block on the gold and currency reserves of such a large country is unprecedented on a global scale.”
Considered the toughest economic sanction imposed on the country following Vladimir Putin’s invasion of Ukraine in late February, the asset freeze is designed to prevent Russia from mitigating the blow to its financial system and economy in broadly through a series of other economic sanctions.
Russia had accumulated more than $600 billion in foreign currency reserves held in dollars, gold and other currencies, about half of which would be frozen by restrictions on its central bank.
Built over several years as part of a so-called “Fortress Russia” strategy following the annexation of Crimea in 2014, the sanctions make it more difficult for the central bank to intervene in the foreign exchange markets to defend the value of the ruble.
Nabiullina did not specify when or where a legal challenge could be made. His comments follow a similar threat made by Russian Finance Minister Anton Siluanov, who said earlier this month that the Kremlin would sue if the West tried to force it to default on its sovereign debt.
In one example of such a court case involving central bank reserves, the UK Supreme Court ruled in December against a venezuelan call to allow access to nearly $2 billion in gold that he held at the Bank of England.
The ruble tumbled more than 40% after Western governments imposed sweeping economic sanctions for the first time, although it has recovered to pre-invasion levels in recent weeks. Without access to half of its foreign exchange reserves, Russia’s central bank imposed strict capital controls and raised interest rates in an effort to prop up the currency.
Nabiullina seemed to suggest the sanctions were having an impact, saying there would be “no need for such drastic measures” if he had access to his $600 billion war chest.
“We introduced these monetary regulations. I know a lot of companies also complained a lot about foreign economic activity, when it was hard to pay. But it was a forced measure. If we had these reserves of gold and foreign exchange in possession, and if this part had not been frozen, there would have been no need for such draconian measures on the movement of capital,” she said. .
The central bank governor was added by the Canadian government to a sanctioned list on Tuesday alongside 13 other Russians, including Putin’s two adult daughters. This is the first time she has been personally singled out by a Western government, the Canadian government said it was doing so to hold the Russian president “and his associates accountable for their complicity in the invasion of Ukraine. by the Russian regime.