Bank of Russia Governor says she is bracing for more sanctions

Bank of Russia Governor Elvira Nabiullina, who helped the Kremlin absorb the blow from sweeping sanctions over the invasion of Ukraine, said she’s preparing for a strengthening of penalties aimed at the country’s economy.

The restructuring of Russia’s economy is proceeding “quite quickly” as businesses adapt to the sanctions, Nabiullina said in an interview with RBC news published Monday. There’s a temptation to think “we are, as they say, knee-deep in the sea” after weathering the initial storm, though “we must be prepared for increased sanctions pressure,” she said.

The US Treasury announced Friday that it would use sanctions against banks that facilitate deals in which Russia procures semiconductors, ball bearings and other equipment necessary for its war machine — even if they’re unaware they’re doing so. The European Union backed a 12th package of sanctions against Russia on Dec. 15.

In the lengthy interview that made no mention of Ukraine or of the war that triggered the unprecedented sanctions, Nabiullina said cross-border payments remain “a problem for many businesses.” There are also “very serious” challenges in developing long-term financing, she said. 

“We cannot say that we have answered all the challenges,” Nabiullina said. Still, she said she’s “quite positive about the development of the financial sector, its sustainability.”