How The War Between Ukraine And Russia Affact The Foreign Trade

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How The War Between Ukraine And Russia Affact The Foreign Trade

On Feb.21^st, 2022, on behalf of Russian Federation, president Mr.Vladimir Putin declared that Russia acknowledge the independence of People’s Republic of Donestsk and People’s Republic of Lugansk. Later in the morning of Feb.24^th, president Mr. Vladimir Putin declared that the Russian army will take special action in Donbas area. It’s to achieve the demilitarization and denazification in Ukraine. Putin said that is the only way to eliminate the war risk in Europe.

One hour after the special action, Russian army destroyed all of the Ukrainian air force and the navy with precision guided munition. Then the Russia army attacked Ukraine from Crimea and Republic of Belarus and landed from Odessa and Azov Sea. So far, Russia army has took action from three directions. According to the report, the armed helicopter and armored force has been appeared around Kiev, the capital of Ukraine.

Just few hours after the military action, America, France, Britain and NATO members declared to launch serious economic sanctions against Russia. The concrete measures including frozen the assets of Russian banks, forbid residents to invest in Russia and forbid to buy Russia debt personally in financial aspects. For the economic aspects, Germany declared that shut down the “Nord Stream-2” project. Western countries try to attack Russia with financial and economic means and will not war to Russia.

For the foreign trade industry, how the war influence it?

On Feb 25^th, the network in Ukraine has been shut, so the orders can’t continue any more. No body wants to risk the war.

On, Feb 24^th, ruble to dollar exchange rate became 1:86, while ruble to euro exchange rate became 1:99 because of the economic sanctions. And the exchange rate has great fluctuation. So the buyers in Russia want to wait the stable exchange rate and then pay the final payment.

Western countries forbid Russia to trade with other countries using dollar and euro. Is that means the we can’t receive the final payment ? Not exactly. Except dollar, Russian buyer can pay China Yuan. And it’s reported that Russia has undersell 12 thousand million America government bond and buy much China Yuan in the meantime. So Russian buyer can pay with China Yuan.

But the Ukraine situation is still uncertain. What is certain is that the foreign trade industry in the world will be influenced seriously in a long time.