US worries the effects of taking Russian assets, according to the NYT

Updated: Jul 15

According to the New York Times, seizing the money might ruin the nation's standing with investors.

The White House is concerned that the seizure of Russian assets may harm its reputation, according to a Tuesday New York Times article.

Top officials in President Joe Biden's administration, according to the newspaper's sources, think that seizing assets would be against the law and might deter other nations from using the United States and the dollar as a haven for investments.

At a conference of top economic officials from the G7 nations two weeks ago, the idea of seizing the Russian assets and using them to rebuild Ukraine took center stage. Josep Borrell, the head of EU foreign policy, first proposed the notion, which is backed by Canada, Germany, and certain Eastern European nations. The US has been cautious so far.

Janet Yellen, the secretary of the Treasury, declared last month that it would be unlawful to seize Russian funds to benefit Ukraine. The Biden administration is reportedly considering whether such a move would "urge other countries to place their central bank reserves in other currencies and keep it out of American hands," according to the New York Times. On this matter, no judgment has yet been rendered.

As part of the sanctions put in place in response to Moscow's military campaign in Ukraine, Washington and its allies are said to have blocked $300 billion of Russia's reserves. However, the actual sum can be lower. Throughout $100 billion this money was supposedly frozen by the US, $24.5 billion by the EU, and the remaining funds were purportedly dispersed among central banks around the world.

Last month, Ukrainian President Volodymyr Zelensky predicted that the cost of reconstruction in his nation may reach $600 billion, which means that the assets held by the Russian central bank abroad would only be able to cover a percentage of the costs.

The prospective seizure of Russia's foreign exchange reserves has been described as an act of "total lawlessness" that would jeopardize the foundation of international relations.

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