Britain’s Prime Minister Boris Johnson speaks during a meeting with Ukraine’s President Volodymyr Zelenskiy (not pictured) at the Munich Security Conference in Munich, Germany, February 19, 2022. Matt Dunham/Pool via REUTERS

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  • US and UK could exclude companies from dollar trade
  • Johnson wonders if Putin thinks ‘logically’
  • The UK is the center of global currency trading
  • Many Russian exports are denominated in US dollars

LONDON, Feb 20 (Reuters) – The United States and Britain would cut Russian companies’ access to U.S. dollars and pounds sterling if the Kremlin ordered an invasion of Ukraine, British Prime Minister Boris said on Sunday. Johnson.

The United States and Britain have repeatedly warned that Russia is about to invade Ukraine, a step that Washington and London say would spark the biggest conflict since the end of World War II. . Russia denies plans to annex Ukraine.

Johnson said Western sanctions against Russia in the event of an invasion would go much further than he had previously suggested in public.

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“We will even, together with our American friends, prevent them from negotiating in pounds and dollars,” Johnson told the BBC. “It’s going to hit very, very hard.”

Johnson, however, wondered if the threat of sanctions would be enough to deter Russian President Vladimir Putin, as the Kremlin leader might not be thinking logically.

“We have to accept for now that Vladimir Putin may be thinking illogically about this and not seeing the catastrophe ahead,” Johnson said.

Britain, home to the center of the world’s currency trade, has previously threatened to block Russian companies from raising capital in London and exposing what Johnson calls the ‘Russian doll’ of property and ownership companies.

Britain did not specify who would fall under the sanctions, but promised there would be nowhere for Russian oligarchs to hide. Johnson said targets could include Russian banks. Read more

Russia denies plans to annex another part of Ukraine, having taken Crimea in 2014. Putin says the West is stirring up hysteria in a crude attempt to lure Russia into war after he ignored Kremlin concerns about NATO enlargement after the Cold War.

Russia, by Western estimates, has more than 150,000 troops on the Ukrainian border.

Such assessments of American and British spies are not to be trusted because they made many serious mistakes before the US invasion of Iraq, Russia’s first deputy permanent representative to the United States has said. United Nations, Dmitry Polyanskiy. Read more

TRADE IN DOLLARS

Given Russia’s position as one of the world’s leading exporters of oil, gas and metals – priced and settled largely in US dollars – preventing Russian companies from accessing markets in dollars could have a stinging impact.

Putin has repeatedly called for reducing reliance on US dollar trade and recent major energy contracts with China have been denominated in euros.

Russia’s largest oil company Rosneft (ROSN.MM) has changed the currency of its contracts entirely from euros to US dollars to protect its transactions from US sanctions, CEO Igor Sechin said in 2019.

London is by far the world’s largest center for foreign exchange, accounting for more than 43% of total turnover, according to the Bank for International Settlements. The dollar is the most traded currency, followed by the euro, the yen and the pound sterling.

Hundreds of billions of dollars have flowed into London and Britain’s overseas territories since the fall of the Soviet Union in 1991, and London has become the Western city of choice for Russia’s super-rich and others. former Soviet republics.

Western intelligence thinks Putin could order an unconventional attack on Ukraine, which could force the West to make a quick judgment on imposing sanctions, a senior Western official said on Friday. Read more

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Written by Guy Faulconbridge; Editing by Frank Jack Daniel

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