Visa and Mastercard halted operations in Russia this past Saturday. Both companies declared their decision was due to the ongoing war in Ukraine. They are among the growing list of companies sanctioning Russia. However, the impact of these two companies may have some of the largest ramifications for the Russian economy.
Citizens will still be able to access their bank accounts domestically. However, the sanctions will prevent any type of foreign transaction. With limited options, Russia has begun to turn to China. Russian banks have reportedly started processing credit through the Chinese credit company UnionPay. This has the potential to unify Chinese and Russian economies and solidify their relationship.
Russian sanctions have led to strain on the American economy as well. For example, the average price of a gallon of gas has hit an all time record high at $4.104 on Monday. Also, the Biden administration is weighing a ban on Russian oil. Should this ban take effect, the price of gas would surely increase further.
The war region in Ukraine also happens to be one of the world’s largest producers of grain. The war has prevented exports of grain. As time continues to pass, this will affect outside markets more and more. Grain has climbed to an increase of 68% so far in 2022, and shows little sign of stopping. Food prices across the U.S. have steadily risen over the past year. These economic issues are likely to trickle down and affect the rest of the food market in upcoming months. Be prepared.