The Treasury Department announced Monday that Americans are prohibited from engaging in any transactions with Russia’s Central Bank while freezing the financial institution’s assets in the US, dealing another blow to the Russian economy that has already seen the value of its currency plummet.
The latest round of sanctions targeted the Central Bank, Russia’s National Wealth Fund and Moscow’s Ministry of Finance “to prevent Putin’s regime from raising capital to fund its invasion of Ukraine and other priorities,” the department said in a statement.
The department also announced that it had slapped sanctions on the Russian Direct Investment Fund, whose chief executive officer, Kirill Dmitriev, is a key ally of Russian President Vladimir Putin.
More than a half a million people had fled Ukraine since Russia’s invasion on Thursday. AP Photo/Visar Kryeziu
Refugees fleeing conflict in Ukraine arrive at the Medyka border crossing in Poland, Monday, Feb. 28, 2022. AP Photo/Visar Kryeziu
People stand in line to use an ATM machine in Saint Petersburg, Russia, February 27, 2022. REUTERS/Anton Vaganov
The Russian and Ukrainian delegations have met for their preliminary talks Monday. Sergei Kholodilin/BelTA Pool Photo via APA senior Biden administration official said the sanctions were intended to “disarm” the Central Bank.
“The way we can do that, for example, is by preventing US, EU, UK persons from selling rubles to the Central Bank of Russia. That means very simply, the Russian Central Bank can’t support the ruble, full stop, and that means our sanctions will have much greater force,” the official said in a briefing about current and future penalties against the Russian government.
The official added that Moscow’s currency reserve — worth an estimated $600 billion before the invasion of Ukraine — is “only powerful if Putin can use it, and without being able to buy the ruble from Western financial institutions, for example, Putin’s Central Bank will lose the ability to offset the impact of our sanctions.
A senior Biden administration official said the sanctions were intended to “disarm” the Central Bank. AP Photo/Alex Brandon
The chief executive officer of the Russian Direct Investment Fund is a key ally of Russian President Vladimir Putin. SERGEI GUNEYEV/SPUTNIK/AFP via Getty Images
Ukrainian President Volodymyr Zelensky delivering an address in Kyiv. UKRAINE PRESIDENCY/AFP via Getty Images
Ukrainian Minister of Defense Oleksii Reznikov attends peace talks with the Russian delegation in the Gomel region, Belarus, Monday, Feb. 28, 2022. Sergei Kholodilin/BelTA Pool Photo via AP“The ruble will fall even further, inflation will spike, and the Central Bank will be left defenseless,” the administration official continued.
Germany, France, the United Kingdom, Italy, Japan, the European Union and others are participating in the sanctions against the central bank, the White House said.
The weight of the sanctions already put in place against other banks, Putin personally, Foreign Minister Sergey Lavrov and individual oligarchs who make up the Russian leader’s inner circle have sent shockwaves through the Russia economy, causing prices to soar and the ruble to tumble.
Russia’s Central Bank announced on February 28, 2022, it was raising its key interest rate to 20 percent from 9.5 percent. NATALIA KOLESNIKOVA/AFP via Getty Images
Members of the Russian and Ukrainian delegations enter a hall for their peace talks in the Gomel region, Belarus, Monday, Feb. 28, 2022. Sergei Kholodilin/BelTA Pool Photo via AP
Smoke rises over the part of Ukraine’s capital situated on the right bank of the Dnipro River. © Evgen Kotenko/Ukrinform via ZUMA Press Wire
A broken window that was destroyed in an apartment building by recent shelling in the Kyiv outskirts on February 28, 2022. GENYA SAVILOV/AFP via Getty Images
The ruble fell 30 percent against the US dollar early Monday after the US and Western nations blocked some Russian banks from the SWIFT international banking system.
It recovered slightly later in the day.
Russians have been streaming to banks and ATMs to withdraw cash as the sanctions took effect, according to reports.
And Moscow’s department of public transport has warned residents that they could have problems using Apple Pay, Google Pay and Samsung Pay for their fares because of sanctions against Russian bank VTB, which handles payments for the city’s metro, buses and trams.
Cars are stopped at a roadblock set by civil defensemen at a road leading to central Kyiv, Ukraine, Monday, Feb. 28, 2022. AP Photo/Emilio Morenatti
The UN human rights chief said on February 28, 2022, that at least 102 civilians, including seven children, had been killed in Ukraine since Russia launched its invasion five days ago. GENYA SAVILOV/AFP via Getty Images
Russians have been streaming to banks and ATMs to withdraw cash. GENYA SAVILOV/AFP via Getty ImagesThe Central Bank on Monday was forced to raise its key interest rate to 20% from 9.5% to “offset increased risk of ruble depreciation and inflation,” it said in a statement.
In an effort to stave off further chaos, the Central Bank announced that the Moscow Stock Exchange would remain closed Monday due to the “developing situation.”
With Post wires
