Janet Yellen, the U.S. Treasury Secretary, warned that the war in Ukraine will send shockwaves across the world in terms of food and energy flow. She further asserted that Russia’s invasion has increased the vulnerability of economies recovering from the pandemic amid spiking prices.
Janet Yellen’s Warning
As reported by CNN Business, Yellen said a in a prepared statement before her annual testimony before the House Financial Services Committee: “Russia’s actions represent an unacceptable affront to the rules-based, global order, and will have enormous economic repercussions in Ukraine and beyond.”
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Food and energy prices have skyrocketed due to the war and the West’s economic sanctions implemented in response, triggering recession fears as pandemic inflation drags on.
Janet Yellen deemed Russia’s invasion of Ukraine as “brutal and unprovoked” and said the Treasury Department will do everything to hold the former accountable for its actions.
She said, “Globally, spillovers from the crisis are heightening economic vulnerabilities in many countries that are already facing higher debt burdens and limited policy options as they recover from COVID-19.”
Further Sanctions
Yellen underlined the impact on the food and energy sectors as both war-locked countries represent almost 30% of the world’s wheat exports. The Treasury will urge multilateral development banks to boost food aid to “vulnerable” countries.
"We are witnessing the vulnerability that comes from relying on one fuel source or one trade partner, which is why it is imperative to diversify energy sources and suppliers," she said.
She also asserted, CNBC reports, that global organizations such as the International Monetary Fund and World Bank are working together to provide aid to Ukraine and sanction Russia.
“It cannot be business as usual for Russia in any of the financial institutions,” Yellen said.
The U.S. announced fresh sanctions against Vladimir Putin’s two adult daughters, Katerina and Maria, and against the wife and daughter of Foreign Minister Sergey Lavrov, as well as Former President and Prime Minister of Russia Dmitry Medvedev, and Prime Minister Mikhail Mishustin.
According to CNBC, Sberbank Rossii PAO (MCX:SBER) and Alpha Bank (OTCMKTS:ALBKY), two of Russia’s largest banks will also undergo full-blocking sanctions for the first time, albeit with carve outs for energy purchases.
