United States restricts transactions with Russian central bank
The US Treasury Department said on Monday that all US transactions with Russia’s central bank have been suspended, effective immediately, as part of an extraordinary measure to punish Moscow for its invasion of Ukraine.
“This action essentially immobilizes any assets of the Central Bank of the Russian Federation owned in the United States or by US citizens, wherever situated,” the Treasury stated.
Russia’s capacity to protect the currency and support its economy will be severely hampered.
This latest step, together with others by US partners, will make it difficult for Russia’s central bank to purchase rubles using its large hard currency holdings.
“Transactions to safeguard the currency, which is already tumbling,” claimed a senior government official, “will no longer be viable, and fortress Russia will be exposed.”
According to the source, the combined sanctions package would create a “vicious feedback cycle.”
“Inflation will almost certainly rise. The purchasing power of the average person is expected to dwindle. According to the official, “investment is expected to fall.”
“Our goal is to ensure that the Russian economy falls backwards if President Putin decides to go through with the invasion of Ukraine, and we have the instruments to do so,” the source told reporters.
The Russian Direct Investment Fund, a state-owned agency that Russia uses to raise cash abroad, was also sanctioned by the US on Monday. Kirill Dmitriev, a close friend of Putin, is in charge.
This official said, “This fund and its leadership are icons of deep-seated Russian corruption and worldwide influence peddling.”