Russia has taken the first step towards fulfilling a threat made by Prime Minister Dmitry Medvedev it will take retaliatory action against new United States sanctions to be imposed by the end of August.
Russia announced a further decrease in its holdings of U.S. securities in response to the new sanctions, said Finance Minister Anton Siluanov. He said Russia has lowered to the minimum level and will further decrease its investment in the U.S. economy in explaining the sudden drop in Russia's holdings of U.S. Treasury bonds.
Russia, however, said it has no plans of closing down U.S. companies doing business in Russia. "But we are not planning now any limitations such as shutting down McDonald's," he said. Siluanov noted the clamor among some Russian lawmakers to shut down large U.S. companies in Russia.
He said Russian citizens work in these companies. These American business firms also pay taxes in Russia. But he did concede that U.S. sanctions will boost inflation in Russia because it hurts the ruble
Neither does Russia have plans banning the use of the dollar in Russia. Siluvanov said Russia has no such plans to ban the use of the dollar. He said doing this will lead to an impasse.
Siluanov described the new U.S. sanctions as unpleasant but not fatal. He said some of the new sanctions will restrict purchases of Russian government bonds.
Russia's abandoning U.S. treasuries is nothing new, however. It did so over the past few months as relations soured between Washington and Moscow over a host of unpleasant events -- chiefly Russia's meddling on Donald Trump's behalf during the 2016 election.
Siluanov said Russia will also settle more of its debts in the ruble and other currencies such as the Euro. He astoundingly claimed this move will eventually negatively impact U.S. investors.
Medvedev last Aug. 10 said Russia will regard any U.S. move to curb the activities of its banks as a declaration of economic war and will retaliate in kind. His threat was triggered by Washington's imposition of fresh sanctions last Aug.8 after it determined Russia was behind the poisoning of an ex-Russian spy and his daughter in the United Kingdom.
Washington's announcement of sanctions sent the ruble plummeting to a two-year low against the dollar.
