US State Secy Blinken avers ban on Russian gold imports to cost Moscow $19bn per year

US State Secretary Antony Blinken on Sunday stated that imposing an embargo on the import of Russian gold will cost them nearly $19 billion in revenue per year. Speaking at a regular presser, Blinken asserted that the ban on gold purchases will hit Russia's "significant" source of war chest funding.

Notably, gold is Russia's "second-most" lucrative business after energy and is responsible for approximately $17 billion to $18 billion per year. In 2020, Russian gold exports made up 5% of the global gold sale market, the US State Department reported. 90% of precious yellow metal was exported to the UK, while the US imported only $1 million worth of gold in the 2020-2021 span, the White House said. Most of it is sold to G7 countries, thus, "cutting that off, denying access to $19 billion of revenues a year, that is significant," Blinken stressed when asked about the impact of the just-announced ban on Russian gold exports.

G7 announced ban on Russian gold exports

On the first day of the three-day summit, the G7 leaders- UK PM Boris Johnson, US President Joe Biden, Italian Prime Minister Mario Draghi, Japanese Prime Minister Fumio Kishida, German Chancellor Olaf Scholz, Canadian PM Justin Trudeau, and European Union (EU) President Ursula von der Leyen- announced a ban on gold imports from Russia.

This came in response to the ongoing war in Ukraine. The idea was in light of increased gold exports from Russia to the elites in western nations, in a quick evasion of West-led sanctions. "Putin is squandering his dwindling resources on this pointless and barbaric war. He is bankrolling his ego at the expense of both the Ukrainian and Russian people," Johnson said, adding that "We need to starve the Putin regime of its funding."

Sanctions have 'dramatic effect' on Russia: Blinken

Meanwhile, despite the sanctions slapped on Russia to cripple its economy, the oil products and the rate of the ruble are higher than earlier. In response, Blinken highlighted the "dramatic effect" of the penalties was already evident and in fact are leaving a profound impact on the Russian financial and economic sector. "Even as it gets oil revenues with higher prices, it’s unable to spend them because of the export controls.  It can’t acquire what it needs to modernize its defense sector, to modernize its technology, to modernize its energy exploration, which means that over time each of these areas is going to go into decline," the US State Secretary said.

Blinken further displayed confidence in predictions that said the Russian economy is expected to shrink by at least 15% next year. This comes as the rate of the ruble has been "artificially propped up at great expense," Blinken stated. He added that at least 1000 international companies have suspended operation in the Russian market, leading to a direct blow on the job sector and in turn the standard of living in the country.

(Image: AP)