‘Russian Economy Held Up Despite Sanctions but Problems Lie Ahead’: US Treasury Chief Yellen in Bengaluru

US treasury secretary Janet Yellen on Thursday said the US wants to see more effective and tougher sanctions on Russia during a meeting of G20 finance ministers and central bank governors (FMCBG) under India’s presidency in Bengaluru.

Yellen also met her counterpart Union finance minister Nirmala Sitharaman.

During the meeting, the crisis in Ukraine was widely discussed and Yellen said that the US and its allies are continuing to work on sanctions. Yellen pointed out that the Russian economy has been able to fend off the negative effects of the sanctions to some extent.

“While by some measures the Russian economy has held up better than might initially have been expected, Russia’s now running a significant budget deficit.,” Yellen said.

“Russia’s now running a significant budget deficit. It’s finding it extremely difficult because of our sanctions in our export controls to obtain the material that it needs to replenish its munitions,” the former US Federal Reserve chief said.

Yellen reiterated the Biden administration’s claim that Russian oil revenues were 60% lower than in the immediate aftermath of the invasion.

She also outlined that the price cap on Russian crude oil followed by caps on the prices of Russian refined products like diesel and fuel oil early this month have led to reduction of revenues.

“We see clear signs that our policy is working to reduce Russian revenues and stabilise global energy markets,” Yellen said

“We will continue to impose further sanctions. We’re working with our allies to continue to degrade Russia’s ability to fight this unjust war,” Yellen said.

“We have continued to see emerging markets negotiate steep discounts on Russian oil – which keeps oil on the global market but sharply reduces the Kremlin’s take,” she further added.

Yellen during her meeting with Nirmala Sitharaman thanked her counterpart for her hospitality and stressed the United States’ support for India’s G20 presidency.

Yellen and Sitharaman discussed cooperation on the evolution of multilateral development banks and encouraged strengthened health-finance coordination.

She lauded India’s efforts for “taking a leadership role in promoting sovereign debt restructuring, while encouraging faster G20 efforts on existing debt restructuring cases.”

(with inputs from Abhishek Jha)

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