Biden's ban on the exchange of special borrowing rights with Russia: what would it mean

Biden's ban on the exchange of special borrowing rights with Russia: what would it mean

Biden's ban on the exchange of special borrowing rights with Russia: what would it mean
News

5 October, 16:15
Economy
US President Joe Biden, by his decree, prohibited the US Treasury from participating in operations for the exchange of Special Drawing Rights (SDR) located in Russia, as well as from Belarus. This was stated by the press service of the White House.

Yekaterina Maksimova

Anton Tabakh, chief economist at the Expert RA rating agency, explained to NI that the restrictive measure proposed by Biden will not have an impact on the Russian economy. "Russia has not resorted to using the SDR instrument since 1998. And, given the large volume of its own foreign exchange resources, it does not plan to use it at the moment", - Anton Tabakh believes.

Special Drawing Rights is an artificial and virtual means of payment settlement. According to RBC , the SDR exchange rate is determined daily based on the exchange rates of the main currencies - the dollar, the euro, the yen, the British pound and the yuan.

Countries (members of the International Monetary Fund) can use Special Drawing Rights in transactions on credits and loans, when repaying obligations between themselves and in transactions with the participation of the IMF. Also, countries can change SDR to currency.

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