Amid reports circulating in Russian state media that claim Putin signed a law this week exempting individuals from paying value-added tax (VAT) on the purchase of the precious metal, Washington is working to dissuade the countries to liquidate gold to resist the biting sanctions.
A bipartisan group of senators – Angus King, John Cornyn, Bill Hagerty and Maggie Hassan – are trying to target Russia’s ability to sell gold reserves, of which it held around $132bn (£100.9bn). ) in January.
Meanwhile, the Kremlin would try to provide support to Russian citizens looking to invest their rubles – but not by buying US dollars, which has been banned.
Putin’s regime is increasingly isolated, with Moscow describing its situation as “turbulent”.
Spokesman Dmitry Peskov said Thursday: “Our economy is currently experiencing a shock and there are negative consequences. They will be minimized.
“It’s absolutely unprecedented. The economic war that has started against our country has never happened before. So it’s very difficult to predict anything.”
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Although Mr Peskov added that measures were already being taken to mitigate the impact, he did not suggest what they looked like.
The United States, in its effort to continue to punish Moscow for the war launched in Eastern Europe, is seeking to address areas the country may resort to in order to dodge some of the damage suffered in the first place.
Senator Cornyn said: “Russia has taken a page out of Venezuela’s book by exploiting a loophole in current sanctions that allows them to launder money through the buying and selling of gold.”
Russia is the fifth largest owner of sovereign gold in the world.
Senator Hassan asserted, “The United States and our allies must be firm in our resistance to Russian aggression and ensure that we block any escape route from Putin to circumvent the full weight of our sanctions.”
Senator King, calling Russia’s gold supply one of the Kremlin’s “scarce remaining assets” to support the country’s economy, added: “By sanctioning these reserves, we can further insulate Moscow from the world economy and increasing the difficulty of Putin’s increasingly costly military campaign. .”
The move could also prevent banks in countries like China and India from buying or lending against Russia’s sovereign gold stock, adding to a ban already imposed in the West.
Russian gold is virtually excluded from the larger markets of New York and London because Western lenders cannot transact with the central bank.
As the country struggles to avoid a financial meltdown, JPMorgan said last week that the country’s decline in economic output was comparable to the 1998 crisis.
The ruble, having lost 40% of its value, is under intense pressure.
On February 23, the day before the start of the full-scale invasion of Ukraine, it took 80 rubles to buy one US dollar. On Thursday, despite desperate measures such as doubling interest rates to 20%, it took 119.