Russian central bank is a tool of Kremlin system, Lithuanian c. banker says

  • 2022-03-14
  • BNS/TBT Staff

VILNIUS – Russia's central bank is the Kremlin system's tool that has contributed significantly to its military aggression against Ukraine, Gediminas Simkus, Lithuania's central bank governor, said on Monday.  

"I suggest that we have no illusions about a politically unaffected Russian central bank. This is an institution that contributed a lot to this aggression taking place, because it accumulated huge reserves, the imaginary security that the Kremlin had," Simkus told reporters. 

"It is part of the same system, a cog in the Kremlin's system," he added.   

According to Simkus, it will take some time until the impact of the Western ban on Russia's use of its central bank reserves, and sanctions targeting Vladimir Putin and those around him, and the Russian financial sector becomes visible.

"These effects are not immediately apparent in the Russian economy. It takes some time for them to come," he said. 

Following Russia's invasion of neighboring Ukraine, Western countries froze half of the Russian central bank's reserves worth more than 630 billion US dollars, cut off some Russian and Belarusian banks from the SWIFT global interbank payments system, tightened controls on cryptocurrencies, and imposed personal sanctions on nearly 1,000 Kremlin-linked individuals and more than 50 businesses.