Source: Money Review
Credit Suisse's strategic analyst Zoltan Pozsar, who shows that Russia has about $ 300 billion in foreign currency swaps abroad, reveals the difficulty Western governments face in imposing sanctions on Russia. This is money that can shake the financial markets if they "freeze" in the context of sanctions or if they move abruptly to avoid them, the analyst stressed.
"When (cash) flows change, spreads can also change dramatically. If things escalate, it is difficult not to see a direct effect on exchange rate swaps and the Libor dollar's interbank rate, given Russia's huge surpluses and where these surpluses are located," Pozsar explained.
Russia's central bank and private sector have almost 1 trillion dollars in liquid wealth, with much of it placed on the dollar. In fact, as Pozsar notes, Russian positions in the dollar are even bigger than people think, even after 2018, when Russia sold all the US government bonds it held.
It estimates that about $ 200 billion is in foreign exchange swaps and another $ 100 billion in foreign bank deposits.
This is a large enough amount to significantly move the money markets.
