![Ukraine Conflict, Sanctions Decreased Banking Flows to Russia, Allies by 20%-60% - IMF](https://photo-cdn.urdupoint.com/images/UrduPoint-English-22.png)
Ukraine Conflict, Sanctions Decreased Banking Flows To Russia, Allies By 20%-60% - IMF
Muhammad Irfan Published April 05, 2023 | 06:30 PM
![Ukraine Conflict, Sanctions Decreased Banking Flows to Russia, Allies by 20%-60% - IMF](https://photo-cdn.urdupoint.com/images/UrduPoint-English-22.png)
WASHINGTON (UrduPoint News / Sputnik - 05th April, 2023) The conflict in Ukraine and the sanctions imposed by the collective West on Russia have reduced cross-banking and portfolio debt flow allocations to Moscow and its allies by between 20% and 60%, the International Monetary Fund (IMF) said in its new Global Financial Stability Report on Wednesday.
"After Russia's invasion of Ukraine and the subsequent sanctions imposed by the United States and European Union on Russia, cross-border banking and portfolio debt flows to Russia and its allies (countries that rejected the motion in the United Nations in March 2022 to condemn Russia's war on Ukraine) have reversed sharply, with allocations falling by about 20 and 60 percent relative to prewar levels, respectively," the report said.
The IMF warned in the report that geopolitical tensions, which have risen in recent years, have increased restrictions on cross-border capital flows.
The geopolitical tensions are a factor that could have adverse implications for macro-financial stability, the report said.
"Imposing financial restrictions, or increased uncertainty and risk aversion generated by geopolitical tensions, could exacerbate global financial fragmentation as international investors reallocate investment portfolios and credit lines away from geopolitically more distant countries," the report said.
The resulting situation could trigger a sharp reversal of capital flows and a decline in asset prices, with associated consequences for macro-financial stability, the report added.
In the long term, countries may become more vulnerable to adverse domestic and external shocks because of increased financial fragmentation, according to the report.
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