Yellen and other top finance officials from the Group of 20 Rich and Top Developing Countries are gathering on the Indonesian island of Bali for meetings starting on Friday. Yellen is seeking support for a cap on Russian oil prices that could help control energy costs and ease decades of high inflation seen in many countries.
Oil prices have skyrocketed, in part due to the war in Ukraine, which has pushed up energy costs, accounting for about half of the increase in the 9.1 percent year-over-year increase in US consumer prices in June, Yellen noted.
It would be the latest attempt to starve Russia of military revenue in the face of thousands of sanctions already imposed to punish Moscow for its aggression.
“The price cap on Russian oil is one of our most powerful tools to address the pain Americans and families around the world are feeling at gas pumps and groceries right now. now, a cap on the price of Russian oil,” Yellen said at a news briefing in Bali also displayed online.
Yellen said no price has yet been determined for such a cap, but the price would have to be one that “clearly gives Russia an incentive to keep producing, which would make it profitable to produce.” Russia”.
She said she “hopes” that countries such as China and India, which have recently increased their imports of Russian crude, sold at a high discount, will view the observation of a price ceiling as in their own interest. surname.
Without a price cap, a ban by the European Union and possibly the United States on the provision of insurance and other financial services would go into effect. “So we are proposing an exception that allows Russia to export as long as the price does not exceed an unknown level,” Yellen said.
The war’s impact has been hardest hit on economies already grappling with mounting debt and other crises. Yellen said the main goal of the Bali meetings was to push countries like China to do more to help debtor nations including Sri Lanka and Pakistan restructure their obligations.
Leader International Monetary Fundmeanwhile, warned that the outlook for the global economy has turned murky and could worsen without better coordination on a range of issues.
Kristalina Georgieva said in a blog post that decisive action is needed to reduce inflation and keep the world moving towards recovery from the coronavirus pandemic.
She said central banks needed to act now to help bring soaring inflation under control to mitigate future shocks to economies and the financial system. Some 75 central banks have raised interest rates, an average of 3.8 times, over the past year to try to contain inflation, she noted.
“It’s going to be a tough 2022 – and possibly a tougher 2023, with increased recession risk,” she said.
Countries whose economies have fallen into crisis, such as Sri Lanka and Pakistan, are turning to IMFa lending arm of the World Bank, and other institutions to help them cope with rising debts and dwindling foreign exchange reserves – problems that have increased as the prices of oil, wheat and Other commodities skyrocketed, in part due to Russia’s attack on Ukraine.
“Time is not on our side,” Georgieva said, describing such efforts as an “urgent need.”