MOSCOW –
The U.S. Treasury Department on Monday announced new sanctions targeting the Russian central bank and state investment funds in the latest hard-hitting retaliation for the invasion of Ukraine.
The move was described as the most “significant action” that Treasury has taken against an economy of Russia’s size, according to a senior administration official who briefed reporters on the sanctions on the condition of anonymity.
Biden administration officials said Germany, France, the U.K., Italy, Japan, European Union and others will join the U.S. in targeting the Russian central bank.
“The unprecedented action we are taking today will significantly limit Russia’s ability to use assets to finance its destabilizing activities, and target the funds Putin and his inner circle depend on to enable his invasion of Ukraine,” Treasury Secretary Janet Yellen said in a statement.
Treasury said the move effectively immobilizes any assets of the Russian Central Bank in the United States or held by Americans. The Biden administration estimated that the move could impact “hundreds of billions of dollars” of Russia funding.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
Russia’s central bank sharply raised its key rate Monday in a desperate attempt to shore up the plummeting ruble and prevent the run of banks amid crippling Western sanctions over the Russian war in Ukraine.
The bank hiked the benchmark rate to 20% from 8.5%. That followed a Western decision Sunday to freeze Russia’s hard currency reserves, an unprecedented move that could have devastating consequences for the country’s financial stability.
It was unclear exactly what share of Russia’s estimated US$640 billion hard currency coffers would be paralyzed by the decision by Western nations to block Russian banks from the SWIFT global payment system. European officials said that at least half of it will be affected.
That dramatically raised pressure on the ruble by undermining the financial authorities’ ability to conduct hard currency interventions.
The central bank ordered other measures to help banks cope with the crisis by infusing more cash into the financial system and easing restrictions for banking operations. At the same time, it temporarily barred non-residents from selling the government obligations to help ease the pressure on the ruble from panicky foreign investors trying to cash out of such investments.
The ruble sank about 30% against the U.S. dollar early Monday but steadied after the central bank’s move. It was trading at a record low 105.27 per dollar, down from about 84 per dollar late Friday.
Sanctions announced last week had taken the Russian currency to its lowest level against the dollar in history.
