04 March 2022
Ukraine conflict: Russian response to international sanctions
by Kiran Dave
3 March 2022
Russian State Duma introduced several bills to provide social protection to its citizens from sanctions by foreign countries. Some of the key provisions of the bill are related to employment, access to medicines and health products, and pension provision. Another bill provides for credit holidays to citizens until 30 September 2022. The bill established a period during which restrictions on the full cost of a consumer loan is not subject to application.
The Duma also introduced bill to support pensioners amidst international sanctions. The bill allows the government to make decisions on additional payments and increase in pensions. The parliament also introduced a bill that contains provisions for small and medium businesses and information technology (IT) companies, as well as simplified processes for public procurement of products.
It introduced another bill to extend the deadline for paying taxes. The bill provides provision to extend the deadline for paying taxes, insurance premiums, and other such financial fees.
A committee in the State Duma also approved a draft law that criminalises the distribution of false news about military operations to prevent discrediting and criticising the Russian armed forces.
2 March 2022
President Vladimir Putin signed a decree facilitating measures to support financial stability amidst international sanctions. The additional measures are aimed at defending the national interests of the country. Prime Minister Mikhail Mishustin pledged funds to develop the information technology sector. He added that the government will adjust tax arrangements for companies and citizens amidst international sanctions.
The Russian parliament also proposed directing revenue from non-oil and gas industries to support companies amidst international sanctions. It plans to give additional powers to ministers on the export of medical products and medicines. The aim of this measure is to enable faster decision-making regarding export of these products to countries that have imposed sanctions on Russia.
The Russian Ministry of Finance supported the measure to abolish value added tax on precious metals for citizens amidst international sanctions. Minister of Finance Anton Siluanov stated that buying gold will be an ideal alternative to buying dollars.
1 March 2022
The Central Bank of Russia increased its key policy interest rate to 20%. The bank also introduced capital controls. The interest rates were increased to compensate citizens for increased inflationary risks amidst international sanctions.
The Russian government also banned foreign investors from selling Russian assets. Prime Minister Mishustin stated that this measure was taken to ensure that investors don't make a hasty decision driven by political pressure amidst international sanctions.
26 February 2022
The Russian government banned flights from Bulgaria, Poland, and the Czech Republic as a response to these countries closing their airspace to Russian flights.
25 February 2022
The Russian government will use capital from the National Wealth Fund (NWF) to make up for the shortfalls in state borrowing amidst international sanctions. The government will use the funds to buy state Obligatsyi Federal'novo Zaima (OFZ) ruble bonds from the market. OFZ bonds are domestic ruble bonds of the Russian Federation.
24 February 2022
The Central Bank of Russia increased the liquidity of assets and started selling foreign currency in the FOREX market. The Ministry of Finance also ordered companies like Gazprom and Rosneft to sell 80% of their FOREX revenues.
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3 March 2022
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