Treasury Secretary Janet Yellen has voiced strong support for the idea of liquidating approximately $300 billion in frozen Russian Central Bank assets to assist in Ukraine's long-term reconstruction efforts. Yellen made these remarks during a meeting of Group of 20 finance ministers and central bank governors in Sao Paulo, Brazil.
The United States and its allies had frozen significant amounts of Russian foreign holdings in response to Moscow's invasion of Ukraine. Yellen emphasized the importance of unlocking these immobilized assets to bolster Ukraine's resistance and reconstruction amidst the ongoing conflict, now in its third year.
Yellen highlighted the legal, economic, and moral justifications for utilizing the frozen funds, stating that it would serve as a robust response to Russia's destabilizing actions on the global stage. She argued that redirecting these assets to support Ukraine would signal to Russia that prolonging the conflict is not a viable strategy and could encourage diplomatic negotiations for a peaceful resolution.
While the proposal to tap into Russia's frozen assets gains momentum amid uncertainties in allied funding for Ukraine, concerns have been raised about potential repercussions on the U.S. dollar's status as the world's primary currency. Yellen, however, reassured that the move is unlikely to undermine the dollar's dominance, given the exceptional circumstances of Russia's violations of international norms.
Yellen commended the European Union's recent decision to allocate profits from frozen Russian central bank assets towards humanitarian purposes, endorsing the move as a positive step in supporting Ukraine.
The G20 finance ministers are convening to address various global issues, including poverty alleviation, climate change, and ongoing conflicts in regions like the Gaza Strip and Ukraine. The upcoming G20 summit in Rio is expected to further discussions on these critical matters.
