But wouldn't the Russian government start avoiding accumulation of U.S. Dollars currently that they are sanctioned from using it? All Dollars held within Russia and in Russian banks are essentially "erased" from the ledger.
No, money held by the central reserve and their own banks in their OWN accounts and not overseas accounts as collateral is not touched by these sanctions and the Russian government needs dollars because it has debts to pay, one was just the other day, it has to pay the debt of the companies that are owned by the state, the sum is of around 150 billion, that's why they had reserves in foreign nations, to back up this debt as collateral, not because Russia managed miraculously to set aside 30% of their GDP in savings in 3 years.
If they can't service the debt there will be a default, and if their own companies can't do that either there will be bankruptcies, and assets are going to be seized.
It's the USSR all over again, what other choice do they have than getting dollars? Do you think China will accept rubles for their stuff?
They are sanctioned from using the Dollar, but they are still required to pay their debts? Wouldn't that make the lender, for receiving payments from Russian companies/financial institutions, be breaking U.S. orders under the sanction?
My viewpoint truly is, I believe the sanction might hurt the Dollar more in the future, because other nation-states might start losing trust in the cabal behind the U.S. Dollar.