Russia’s finance minister says his country will continue to reduce investments in U.S. government bonds and may stop making global payments in dollars in response to new sanctions being imposed by Washington against Moscow.
Finance Minister Anton Siluanov told the Rossiya-1 television channel on August 12 that Russia has reduced its investments into the "American economy and American securities to the minimal level and will continue to diminish them."
He also said he did not rule out moving away from the dollar for international payments, adding that it was "a risky tool for payments." The dollar has long been considered the "international currency."
Between March and May, Russia's holdings in U.S. Treasuries fell by $81 billion to about $15 billion.
Some experts played down the effect of the Russian action, saying Moscow was not a major holder of U.S. debt. By comparison, China owns about $1.2 trillion of U.S. debt.
The U.S. State Department on August 8 announced new sanctions after it said it determined that Moscow was responsible for the March poisoning of ex-Russian spy Sergei Skripal and his daughter, Yulia, in the English town of Salisbury with a military nerve agent.
Russia, which denies the allegations, immediately responded by saying it was preparing "countermeasures" to what it calls "categorically unacceptable" new sanctions.
A senior U.S. State Department official said the new sanctions, due to take effect on August 22, will target export licenses of sensitive U.S. technologies and industrial equipment, such as electronics, calibration equipment, and gas turbine engines. Requests for licenses to export such goods to Russia would now be "presumptively denied," the official added.
Russia will also be given 90 days to comply with other demands, including allowing international inspectors into the country to ensure that no chemical or biological weapons exist there.
If Moscow does not comply, a second round of sanctions could further downgrade diplomatic relations with Russia, the State Department official said.
The Russian ruble fell to its lowest level against the dollar in two years after the sanctions announcement, reaching 68 to the U.S. currency.
In his latest comments, Siluanov said the new sanctions would not affect Russia's banks, adding that overall they would be unpleasant but not fatal.
"So, as a matter of fact, these restrictions will backfire on the Americans," he added.
The United States and European Union have already imposed sanctions and other measures against Russia in response to Moscow’s annexation of Ukraine's Crimea Peninsula in 2014, its support for separatists in eastern Ukraine, and its alleged meddling in the 2016 U.S. presidential campaign.
In addition, on August 2 a bipartisan group of U.S. senators said it was proposing the implementation of "crushing sanctions" and other measures against President Vladimir Putin's government "until he ceases and desists meddling in the U.S. electoral process, halts cyberattacks on U.S. infrastructure, removes Russia from Ukraine, and ceases efforts to create chaos in Syria.”
Those sanctions have not yet been finalized, and their prospects in the U.S. Congress are uncertain and could be altered.