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Russia under pressure as sanctions bite
The UK on Monday said it will introduce further sanctions against Russia, promising a “full assets freeze” on all of the country’s banks.
The US on Monday blocked Americans from engaging in any transactions involving Russia’s central bank, the national wealth fund and finance ministry in further punishment of Moscow over its invasion of Ukraine.
The measures mean that the Central Bank of Russia cannot carry out any transactions in dollars, it cannot access its reserves in dollars, its assets in the US are immobilised, and financial institutions that hold Russian reserves in dollars can’t move them.
A treasury department statement said that the move will “disrupt Russia’s attempts to prop up its rapidly depreciating currency by restricting global supplies of the rouble and access to reserves that Russia may try to exchange to support the rouble”.
Secretary of state Antony Blinken said that the US, in coordination with allies and partners, had taken further action against the Russian financial system “in response to Russia’s continuing premeditated war against Ukraine”.
This follows a decision taken by US and allies over the weekend to impose restrictions on the central bank, as well as cut off a set of Russian banks from the SWIFT system.
The department of treasury’s office of foreign assets control has also imposed sanctions on the Russian Direct Investment Fund, its subsidiaries and its chief executive officer, Kirill Dmitriev, who is supposed to be a close aide of Russian President Vladimir Putin.
Canada also joined US in the move and Canadian finance minister Chrystia Freeland said the ban is meant “to ensure that Russia’s invasion of Ukraine will be a strategic failure”.
‘Full assets freeze’
The UK on Monday said it will introduce further sanctions against Russia, promising a “full assets freeze” on all of the country’s banks. Foreign secretary Liz Truss said the freeze would take effect “in days”, as part of new legislation to squeeze Russia’s economy for its “unjustified aggression”.
Traditionally neutral Switzerland will also adopt all the sanctions already imposed by the EU on Russia, including against Putin, Bern said on Monday.
The bank of Japan will freeze Russia’s yen-denominated foreign reserves in cooperation with G7 countries’ efforts to ramp up sanctions, Nikkei reported.
Japan’s central bank had about 4 to 5 trillion yen ($34-43 billion) reserves for Russia as of last year and is to stop transactions to the country and financial institutions, it said,
Singapore will impose “appropriate sanctions and restrictions” on Russia, its foreign minister said, including banking and financial measures and export controls on items that could be used as weapons against Ukrainians.
Russia retaliates
President Vladimir Putin banned all Russian residents from transferring foreign currency abroad, including for foreign debt, part of a package of retaliatory measures for western sanctions.
The steps, which take effect March 1, also include restrictions on companies buying back their own stock, according to the text of the decree published Monday.
Earlier, the Kremlin said Russia’s economic reality had changed but saw no reason to doubt the effectiveness and reliability of the central bank, which hiked interest rates to 20% as it sought to shield the economy.
Sanctions had earlier sent the rouble tumbling nearly 30% to record lows. It clawed back some ground after the central bank raised its main interest rate to 20%, the highest level this century, from 9.5%.
With inputs from agencies
