Venezuela Might Be Affected by Russian Banks' SWIFT Suspension

Analysts from Venezuela have expressed their worries about the expulsion of a number of Russian banks from SWIFT, an international messaging system that allows the interconnection of banks. These measures could affect the finances not only of Venezuela, but also of other countries in the region, damaging their capability to move funds, which is highly dependent on services provided by Russian banks.

Russian Banks’ SWIFT Expulsion Could Affect Venezuela

The recent announcement of the expulsion of some Russian banks from the SWIFT payments system has raised concern about the effects it could have in countries like Venezuela, which is linked to the Russian banking system. Jose Guerra, a Venezuelan economist, was one of the first to speculate about this possible problem on social media.

Guerra stated:

What does it mean for Venezuela? If the government money is in Russian banks, it will not be possible to transfer it to make payments. everything gets complicated.

Guerra further explained that if Venezuelan funds are indeed in Russian banks, companies like PDVSA, the national oil company, would be unable to pay for goods and services through those accounts. “If PDVSA has an account in a Russian bank excluded from SWIFT and wants to make a transfer to Banxico in Mexico, UBS in Switzerland, or a bank in Turkey to pay a supplier, it will not be able to do so that way,” he elaborated.

While there is no direct knowledge about the funds that Venezuela manages through Russian institutions, the sanctions already applied to the South American country have increased reliance on these services, according to reports.

The Devalued Ruble

Apart from the aforementioned connection issue, there is another problem that Venezuelan funds in Russia might face. Since the news about the SWIFT disconnection of some Russian banks was revealed, the ruble has lost more than 30% of its value, hitting institutions and countries that had their savings in the form of the Russian fiat currency.

If Venezuela has funds in Russian banks, they are affected by this situation, which could worsen if the conflict in Ukraine escalates or expands. According to Juan Gonzalez, director of the National Security Council for the Western Hemisphere, these sanctions will affect other countries on the continent. Gonzalez stated:

The sanctions on Russia are so robust that they will have an impact on those governments that have economic affiliations with Russia. So Venezuela is going to start to feel that pressure, Nicaragua is going to start to feel that pressure, as is Cuba.

Venezuela has been accused of using bitcoin to bypass economic sanctions before, but the capabilities and the cryptocurrency holdings of the country are currently unknown.