Russia tells Washington curbs on its banks would be act of economic war

MOSCOW: Russia warned the United States it would regard any US move to curb the activities of its banks as a “declaration of economic war” and would retaliate, as new sanctions took their toll on the rouble and US lawmakers threatened more. The warning, from Prime Minister Dmitry Medvedev, reflects Russian fears over the impact of new restrictions on its economy and assets, including the rouble which has lost nearly six per cent of its value this week on sanctions jitters.
Economists expect the Russian economy to grow by 1.8 per cent this year. If new sanctions proposed by the US Congress and the State Department are implemented in full, which remains uncertain, some economists fear growth could weaken to almost zero.
President Vladimir Putin discussed what the Kremlin called “possible new unfriendly steps by Washington” with his Security Council on Friday.
Moscow’s strategy of trying to improve battered US-Russia ties by attempting to build bridges with President Donald Trump is backfiring after US lawmakers launched a new sanctions drive last week because they fear Trump is too soft on Russia.
That in turn has piled pressure on Trump to show he is tough on Russia ahead of mid-term elections. The State Department announced new sanctions on Wednesday, blaming Moscow for the poisoning of a Russian ex-spy in Britain in March.
The new sanctions pushed the rouble to two-year lows and sparked a wider sell-off over fears Russia was locked in a spiral of never-ending sanctions. Russian Foreign Minister Sergei Lavrov complained about the new sanctions in a phone call on Friday to US Secretary of State Mike Pompeo.
Medvedev, speaking on a trip to Russia’s far east, said: “I can say one thing: If some ban on banks’ operations or on their use of one or another currency follows, it would be possible to clearly call it a declaration of economic war.”
“And it would be necessary, it would be needed to react to this war economically, politically, or, if needed, by other means. And our American friends need to understand this.” — Reuters