Vladimir Putin’s Desperate Move to Rescue Russia’s Collapsing Economy!

In a strategic pivot, Russia is preparing to ease payment restrictions on its fossil fuel exports as economic sanctions start to impact Vladimir Putin’s regime.

Putin has issued a directive to soften the rules that required payments through Gazprombank, a target of US sanctions designed to cripple the Russian economy. Previously, in retaliation to the invasion of Ukraine and subsequent harsh economic sanctions, Putin had demanded Ruble payments for energy through Gazprombank, allowing Russia to bypass restrictions on dealing with dollars and euros.

Under the new order, foreign importers will have the option to settle their bills through alternative banks or “another way agreed upon by the Russian supplier with the foreign buyer.” Despite attempts to lessen reliance, Russia remains a crucial energy supplier to numerous European countries

The Kremlin has previously used energy supplies as a geopolitical weapon, cutting off nations like Germany, but some EU members, including Slovakia and Hungary, still receive gas under old contracts, with Hungary heavily reliant on Russian energy, making up about 66% of its consumption. Maria Shagina, a sanctions expert at the International Institute for Strategic Studies, commented: “Gazprombank was the key financial channel for oil and gas payments with Europe.”

“Blacklisting the bank has already caused the Russian ruble to tumble and it will affect gas payments with Hungary and Slovakia.”, reports the Express US.

After the announcement of new sanctions, the Ruble took a nosedive, leading Moscow’s central bank to halt trading. The Russian economy, already battered by heavy sanctions following its invasion of Ukraine, hasn’t yet forced Putin to back down in Ukraine, contrary to what many Western leaders had hoped.

Even as the economy limps along, it’s strained supporting a war in a country that now devotes 6.3% of its Gross Domestic Product (GDP) to defense, amidst soaring inflation and significant labor shortages. In a bid to rein in inflation, Russia’s central bank hiked interest rates to 21% in October, the highest in 21 years.

This move, aimed at combating rising inflation, drew flak, particularly from defense manufacturing leaders who accused central bank governor Elvira Nabiullina of hindering the war effort.