Sanctions hit trade between Türkiye and Russia hard

#Sanctions #hit #trade #Türkiye #Russia #hard

The sanctions accelerated by the USA after the Russia-Ukraine war hit Russia’s foreign trade. Foreign trade between Türkiye and Russia was also negatively affected by the sanctions.

Sozcu.com.tr

Published: 06 May 2024 – 09:47 Updated: 06 May 2024 – 09:55

While US sanctions targeted Russia’s trade system, Russia’s trade volume with key partners such as Turkey and China dropped sharply.

US pressure on banks that finance trade with Russia has made it much more difficult for money to flow in and out of Russia. According to experts, executive orders issued by the United States late last year prompted banks to refrain from making transactions.

According to the Financial Times, Moscow’s trade volume with key partners such as Turkey and China decreased in the first quarter of this year following sanctions.

USA MAKES THINGS DIFFICULT

Due to sanctions, even financial transactions unrelated to the war have become quite difficult. Currency conversion and commission costs for financial transactions with Russia have also increased.

“It has become difficult for Russia to access the financial services it needs to buy these goods,” said Anna Morris, assistant secretary for global affairs at the U.S. Treasury. Making it much more difficult for money to flow and increasing the cost for Russians is certainly a goal. “The disruption of the system is an important consequence,” he said.

A senior Russian investor who provided information on the subject said, “Things are getting more difficult every month. Dollar one month, Euro the next month; In six months you will be able to do basically nothing. “The logical consequence of this is to turn Russia into Iran,” he said.

SANCTIONS HIT Türkiye-RUSSIA TRADE

On the other hand, sanctions also hit Türkiye-Russia trade. After the Russia-Ukraine war, Turkey’s trade volume with Russia increased, but after the sanctions were imposed, Turkey’s exports dropped sharply.

Turkey’s exports of “high priority” goods to Russia and five former Soviet countries increased 5-fold in 2023 after the war.

In the first quarter of this year, Turkey’s exports to Russia decreased by one third compared to the same period of the previous year, falling to 2.1 billion dollars.

The value of Turkey’s high-priority goods exports to Russia and neighboring countries decreased by 40 percent in the first quarter of 2024 compared to the previous quarter, falling to 93 million dollars.

According to US officials and experts, the sharp decline in exports is due to banks’ fear of US reactions. According to the decrees, banks suspected of doing business with banned companies due to their connections with Russia’s military-industrial complex may also face sanctions.

TRADERS TURNED TO THE RUBLE

Russian traders have turned to smaller banks and alternative currencies as big banks in countries such as Türkiye and China shy away. While foreign trade payments are increasingly being made in rubles, the use of Chinese, Turkish and UAE currencies has decreased.

Russian importers and exporters have also started using rubles for more trade due to the difficulties of exchanging the currency for dollars and euros.

Foreigners are now also allowed to buy rubles from the Moscow Stock Exchange to use in trade. On the other hand, the limited use of the ruble makes it difficult to compensate for the loss in trade volume.