US Treasury Secy says will give $10 bn more to Ukraine, issues warning to China

Yellen made these remarks at a media briefing in Bengaluru on the sidelines of the G20 Finance Ministers and Central Bank Governors (FMCBG) Meet under India’s presidency of the grouping.

According to the Treasury Secretary, the US has already provided $46 billion in security, economic and humanitarian aid, including a commitment to deploy the Patriot missile defence system.

“Our economic assistance is making the resistance possible, funding key public services and is keeping the (Ukrainian) government running,” she said, while noting that February 24 would mark one year of Russia’s “unjust war” in Ukraine.

Continued robust support for Ukraine will be a major topic of discussion during her time in India, she said.

On China’s support for Russia, she said, “With respect to sanctions and aid to Russia, we have made clear that providing material support to Russia or assistance with any type of systemic sanctions evasion would be a very serious concern to us. And we will certainly continue to make clear to the Chinese government, and to companies and banks in their jurisdiction, about what the rules are regarding our sanctions and the serious consequences they would face for violating them.”

Responding to a question on Russia’s economy being relatively healthy despite US curbs, with China and India among those purchasing Russian oil and weapons, Yellen said the sanctions have had a very significant negative effect so far, “though it (Russia) has held up better than initially expected”.

Russia is now running a significant budget deficit, and finding it extremely difficult because of sanctions and export control, Yellen said.

“The immoral war has exacerbated stress on our food systems. Since last year, the US has committed more than $13 billion in humanitarian aid and food security assistance,” she said. The US has worked with countries to ease export restrictions to enable food to flow more freely, including through the Black Sea Green Initiative, which “must be extended past March,” according to Yellen.

She said that despite caps on the price of Russian crude oil and refined products, “we continue to see emerging markets negotiate steep discounts on Russian oil, which keeps (Russian) oil on the global market but sharply reduces Kremlin’s take”.

Responding to questions on the global economy, Yellen said that while there were significant headwinds, “it is fair to say that the global economy is in a better place today than many predicted just a few months ago”.

“In its most recent estimate, the International Monetary Fund has forecast global growth of 3.2 per cent during 2023 which is a notable upgrade since its October (2022) report,” she said.

Financial conditions in emerging markets remain relatively tight but have begun showing signs of easing, she said, while adding that vulnerable countries continue to face acute distress.

On the G20 meetings, she said that a resilient global economy would be discussed, which included working on debt, climate change and evolution of multilateral development banks. “First, we must work together to ease the debt overhang. IMF estimates that around 55% of low-income countries are close to or were in debt distress. I will continue to push for all bilateral official creditors, including China, to participate in meaningful debt treatment for developing countries and emerging markets in distress,” she said.