US Imposes Sanctions on Russia’s Central Bank

The U.S. on Monday imposed new sanctions on Russia targeting the country's Central Bank, a move that will block Americans from doing any business with it and freezing any assets it holds in the U.S.

In a statement Monday, the Treasury Department said the decision would apply to the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation and the Ministry of Finance of the Russian Federation.

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“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,” Secretary of the Treasury Janet Yellen said in a statement. “Today, in coordination with partners and allies, we are following through on key commitments to restrict Russia’s access to these valuable resources.”

Biden administration officials said Germany, France, the UK, Italy, Japan, European Union and others will join the U.S. in targeting the Russian central bank.

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The move follows the Western decision Sunday to freeze its hard currency reserves in an unprecedented move that could have devastating consequences for the country’s financial stability. It was unclear exactly what share of Russia’s estimated $640 billion hard currency coffers will be paralyzed by the decision, but European officials said that at least half of it will be affected.

Russia’s Central Bank on Monday sharply raised its key rate from 9.5% to 20% in a desperate attempt to shore up the plummeting ruble and prevent the run of banks amid the crippling sanctions.

A line for the ATM grows as people try to obtain cash as news of Russia invading Ukraine continues to dominate the headlines, in Slovyansk, Ukraine, Thursday, Feb. 24, 2022.

Russians wary that sanctions would deal a crippling blow to the economy have been flocking to banks and ATMs for days, with reports in social media of long lines and machines running out. People in some central European countries also rushed to pull money from subsidiaries of Russia’s state-owned Sberbank after it was hit with international sanctions.