challenges

Russia’s economy will screech along even if it stops exporting energy to Europe. Sanction-free reserves, higher oil prices and a well-oiled propaganda machine would cushion the blow. That makes President Vladimir Putin’s threats to cut the bloc off from gas more credible.

Ukraine has banned all imports from Russia, one of its key trading partners before the war with annual imports valued at about $6 billion, and called on other countries to follow and impose harsher economic sanctions on Moscow.

The Russian government said on Sunday it has increased its reserve fund used for emergency spending by 273.4 billion roubles ($3.52 billion) to ensure economic stability against the backdrop of Western sanctions over Ukraine.

The European Union on Friday formally adopted new sweeping sanctions against Russia, including bans on the import of coal, wood, chemicals and other products which were estimated to slash at least 10% of total imports from Moscow.

Russia could face its first sovereign external default in over a century after it made arrangements to make an international bond repayment in roubles earlier this week, even though the payment was due in U.S. dollars.