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Sunday, June 4, 2023

Venezuela Might Be Affected by Russian Banks’ SWIFT Suspension

Venezuela Might Be Affected by Russian Banks’ SWIFT Suspension – Venezuelan analysts are concerned by the expulsion of a number of Russian banks from SWIFT, an international messaging system that allows banks to communicate with one another.

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These actions may have an impact on the finances of not only Venezuela, but also other nations in the area, jeopardizing their capacity to shift funds, which is heavily reliant on Russian banks’ services.

The recent disclosure that several Russian banks have been kicked out of the SWIFT payments system has generated concern about the implications for countries like Venezuela, which is largely reliant on Russian banking.

On social media, Jose Guerra, a Venezuelan economist, was one of the first to speculate about this potential problem.

Also Read: Coinbase ‘Will Not Institute a Blanket Ban’ on All Transactions Tied to Russian Crypto Addresses

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Guerra stated:

“What does this mean for Venezuela? It will be impossible to transfer government funds to make payments if they are held in Russian banks. Everything starts to become complex.”

Guerra went on to say that if Venezuelan funds are in Russian banks, organizations like PDVSA, the country’s state-owned oil company, will be unable to pay for goods and services using those accounts. “If PDVSA has a bank account in a Russian bank that isn’t a SWIFT member and wants to pay a supplier, it won’t be able to do so,” he stated.

Aside from the aforementioned connectivity issue, Venezuelan funds in Russia may face another stumbling block. The ruble has lost more than 30% of its value since the news of some Russian banks’ SWIFT disconnection was published, affecting institutions and countries that had their savings in the Russian fiat currency.

If Venezuelan cash are held in Russian banks, the problem will be worsened if the crisis in Ukraine escalates or expands. These penalties, according to Juan Gonzalez, director of the Western Hemisphere’s National Security Council, will have an impact on other countries in the continent. According to Gonzalez:

Also Read: Russia May ‘Nationalize’ Foreign Assets in Response to Western Sanctions, Medvedev Says

“Russian sanctions are so strong that they will affect countries with economic links to Russia.” As a result, Venezuela will begin to feel the pressure, and so will Nicaragua and Cuba.”

Venezuela has previously been accused of utilizing bitcoin to circumvent economic sanctions, but the country’s capabilities and cryptocurrency holdings are currently unknown.

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