US says Russians are trapped in economy

A senior US Treasury Department official said on Friday that Russia was economically “trapped” by Western sanctions and that the ruble’s sharp rise meant little.

“Russia is cornered and on the way to becoming a zero economy, but it is one of the least equipped countries in the world to function as a closed economy” because it depends too much on its exports of raw materials, explained the US official, who asked anonymity.

Also according to the source, Russia suffers “serious” consequences due to Western sanctions imposed in response to the invasion of Ukraine: “High inflation that will only increase, and a deep recession that will only worsen”.

During a phone conversation with journalists, the US Treasury official estimated that the Russian economy could contract by 10% this year.

He also wanted to put into perspective the sharp rise in the ruble, which, despite tough financial sanctions, has regained its pre-invasion value on Feb. 24 of 86 rubles to the dollar.

The source argued that the current high inflation in Russia meant that the local currency was “weakening”. He also recalled that Moscow has implemented strict restrictions to protect the currency.

He also highlighted the emergence of a black market for the ruble, which, according to predictions, will gain visibility and cause the emergence of a parallel quotation of the Russian currency, different from the official one.

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