US steps up sanctions with Russian central bank asset freeze

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The Treasury Department on Monday moved to further cut Russia off from the global economy, announcing it would freeze Russian Central Bank assets held in the United States and impose sanctions on the Russian Direct Investment Fund, a sovereign wealth fund. run by a close ally of President Vladimir V. Putin.

These measures are intended to limit Russia’s ability to use its war chest of international reserves to mitigate the impact of sanctions that the United States and European allies have adopted in response to Russia’s invasion of Ukraine. .

“The unprecedented action we are taking today will significantly limit Russia’s ability to use assets to finance its destabilizing activities and will target funds that Putin and his entourage depend on to enable his invasion of Ukraine,” he said. Treasury Secretary Janet L. Yellen in a statement. declaration.

As a result of the sanctions, Americans cannot participate in any transactions involving the Russian Central Bank, the National Wealth Fund of Russia or the Russian Ministry of Finance.

These measures represent a significant escalation of US sanctions, although the Treasury Department said it was granting an exemption to ensure that transactions related to Russia’s energy exports can continue. It issues a “general license” to authorize certain energy-related transactions with the Central Bank of Russia.

On Saturday, the European Commission, Britain, Canada, France, Germany, Italy and the United States said they would remove some Russian banks from the SWIFT financial messaging system, essentially excluding them from transactions international reserves, and would impose new restrictions on the Central Bank of Russia to prevent it from using its large international reserves to evade sanctions.

Russia has spent the past few years bolstering its defenses against sanctions, amassing $643 billion in foreign exchange reserves in part by siphoning off its oil and gas revenues. The new restrictions imposed by the United States and its allies against the sale of rubles to Russia aim to undermine the country’s ability to support its currency in the face of new sanctions imposed on its financial sector.

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