The World's Financial War Against Russia: What Investors Need To Know

The United States Gold Bureau has constructed an infographic detailing the financial war the West has launched against Russia since it invaded Ukraine earlier this year. The SPDR S&P 500 Trust SPY is down 7.4% since the Russian aggression began on February 24. But sanctions and other actions by countries around the world in response to the war have had a far more crushing impact on the Russian economy.

Goldman Sachs recently projected that these punitive measures, cutting Russia off from the global economy, will lead Russia's GDP to drop 10% in 2022.

Some of the most meaningful actions against Russia include removing Russian banks from the Society for Worldwide Interbank Financial Telecommunications (SWIFT) system. Banks use the SWIFT system for cross-border payments.

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Russia holds about $630 billion in reserves, about half of which were held in foreign banks as of January 2022. The U.S., European Commission, France, Germany, Italy, the U.K. and Canada have frozen all Russian foreign reserves in their respective jurisdictions.

In addition, the U.S. has restricted Russia's largest bank, Sberbank, and several other large Russian banks from making most transactions in U.S. dollars and has restricted U.S.-based purchases of Russian bonds.

The U.S. has also restricted exports of intelligence, defense and energy resources and services to Russia, which is one of the world's largest oil and natural gas producers. The U.S. has already banned imports of oil and gas from Russia, and the U.K. has pledged to phase it out by the end of the year.

If the EU joins the U.S. and U.K. in banning Russian oil and gas, the Gold Bureau estimates the Russian economy could contract by about 20%.

To get a full sense of the scope of the financial war being levied against Russia, take a look at the full infographic below.