BANGKOK – US Treasury Secretary Janet Yellen has urged leaders of major economies to work more closely to counter the impact of Russia’s invasion of Ukraine.

Yellen and other senior finance officials from the Group of 20 leading wealthy and developing countries are gathering on the Indonesian island of Bali for meetings beginning Friday. Yellen sought support for a Russian oil price cap this could help keep energy costs under control and alleviate decades-high inflation in many countries.

Oil prices soared, in part due to the war in Ukraine, pushing up energy costs which accounted for about half of the increase in 9.1% annual jump consumer prices in the United States in June, Yellen noted.

A d

It would be the latest effort to deprive the Russian military of revenue on top of the thousands of sanctions already imposed to punish Moscow for its invasion.

“A Russian oil price cap is one of our most powerful tools to deal with the pain that Americans and families around the world are feeling at the gas pump and the grocery store right now. on the price of Russian oil,” Yellen told a news briefing in Bali also streamed online.

Yellen said no price has yet been determined for such a cap, but the level should be one “that has a clear incentive for Russia to continue producing, that would make production profitable for Russia.”

She said she was “hopeful” that countries like China and India which have recently increased their imports of Russian crude oil, sold at greatly reduced prices, would consider it in their own interest to respect the price cap.

Without price caps, a ban on the European Union and probably the United States on providing insurance and other financial services would come into effect. “So we are proposing an exception that would allow Russia to export as long as the price does not exceed a level yet to be determined,” Yellen said.

A d

The impact of the war was especially felt in economies already struggling with mounting debt and other crises. Yellen said a key objective of the Bali meetings would be to push countries like China to do more to help indebted countries including Sri Lanka and Pakistan to restructure their bonds.

The head of the International Monetary Fund, meanwhile, warned that the outlook for the global economy has darkened and could worsen without better coordinated cooperation on a wide range of issues.

Kristalina Georgieva said in a blog post that decisive action is needed to rein in inflation and keep the world on track for recovery from the coronavirus pandemic.

She said central banks must act now to help bring soaring inflation under control to minimize subsequent shocks to economies and financial systems. Some 75 central banks have already hiked interest rates, an average of 3.8 times, over the past year in an attempt to contain inflation, she noted.

A d

“2022 will be a tough year – and possibly an even tougher 2023, with an increased risk of recession,” she said.

Countries whose economies are already in crisis, such as Sri Lanka and Pakistan, are turning to the IMF, a lending arm of the World Bank, and other institutions to help them deal with their growing debts and the dwindling foreign exchange reserves – issues that have exploded as prices for oil, wheat and other commodities soared, in part due to Russia’s attack on Ukraine.

“Time is not on our side,” Georgieva said, describing the efforts as an “urgent necessity.”