The Biden administration placed new sanctions against Russia’s central bank, its National Wealth Fund, and its Ministry of Finance, the U.S. Department of Treasury said in a news release.
The moves effectively prohibit Americans from doing any business with those Russian entities.
Specifically, the Treasury said that the move, announced Monday, prohibits “United States persons from engaging in transactions with the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation.”
“This action effectively immobilizes any assets of the Central Bank of the Russian Federation held in the United States or by U.S. persons, wherever located,” the release said.
In response, the Central Bank of Russia suspended currency interventions in support of the ruble, the head of the regulator, Elvira Nabiullina, told state-run RT on Monday. Nabiullina said that the regulator cannot carry out such actions because of assets freeze by the EU and United States.
“Due to restrictions on the use of foreign exchange reserves in dollars and euros, we did not carry out any interventions today. The government has announced a decision to introduce the mandatory sale of 80 percent of export earnings,” Nabiullina said. “This measure will ensure an even supply of foreign currency on the domestic fx market to meet the needs of importers and citizens. At the same time we are taking a number of steps to limit export of capital by non-residents.”
A day after Russia’s invasion of Ukraine, President Joe Biden announced that he would place sanctions on more Russian banks, Russian President Vladimir Putin and his inner circle, and Russian sovereign debt.
At the same time, European Union states and other countries have imposed sanctions and economic penalties of their own against Russian assets. Over the weekend, the EU blocked all Russian planes from entering its airspace and barred RT and Sputnik News, two Russian state-backed media outlets, from broadcasting.
“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. “Today, in coordination with partners and allies, we are following through on key commitments to restrict Russia’s access to these valuable resources.”
In a call with reporters, a top Biden administration official said that Monday’s sanctions against Russia’s Central Bank were done because Kremlin officials were “attempting to move assets and there would be a great deal of asset flight starting on Monday morning from institutions around the world.”
While the sanctions will continually isolate Russia and Putin, it’s not clear how the Kremlin will respond. During an address on Sunday, Putin said he authorized the deployment of his country’s strategic defense forces, which oversees some of Russia’s vast arsenal of nuclear weapons.