The United States is escalating sanctions with a freeze on Russian central bank assets
The United States is escalating sanctions with a freeze on Russian central bank assets

The United States is escalating sanctions with a freeze on Russian central bank assets

Funds, according to its website, cooperates with “the world’s leading investors” to make direct investments in leading and promising Russian companies. It has reserved capital of $ 10 billion under management and has attracted over $ 40 billion into the Russian economy. The sanctions prohibit all Americans from investing in the fund and freeze all assets it holds in the United States.

Senior officials in the Biden administration said the actions were effective immediately. They noted that the value of Russia’s ruble had already fallen more than 30 per cent over the weekend, and that Russia’s central bank more than doubled its interest rate to try to mitigate the fallout. They also predicted that inflation would soon rise and economic activity would decline as the country’s currency lost value.

Even nations that usually remain neutral in global conflicts got into the fight.

Switzerland, a favorite destination for Russian oligarchs and their money, announced on Monday that it would freeze Russian financial assets in the country, disregarding its tradition of neutrality to join the EU and a growing number of nations seeking to punish Russia for the invasion of Ukraine . The country said it would immediately freeze the assets by Mr Putin, Prime Minister Mikhail V. Mishustin and Foreign Minister Sergey V. Lavrov, as well as all 367 people against whom the EU imposed sanctions last week.

More aggressive actions in that direction could be in store. Senator Christopher S. Murphy, a Connecticut Democrat, said after a secret briefing Monday that the United States and its allies were preparing to go further than freeze the assets of Mr. Putin and Russian oligarchs and actually begin seizing them.

“This is probably a further step than Putin’s inner circle expected,” Mr. Murphy said on Twitter.

The US measures represent a significant escalation of sanctions, although the Treasury Department said it was making an exception to ensure that transactions related to Russia’s energy exports could continue. It issues a “general license” to approve certain energy-related transactions with the Russian central bank.

The exclusion means that energy payments will continue to flow, reducing risks for global energy markets and Europe, which is heavily dependent on Russian oil and gas exports. U.S. officials said they wanted energy prices to remain stable and did not want a rise in prices in favor of Mr Putin. However, they noted that they were considering measures that would restrict Russia from acquiring technology, as it should be a leader in long-term energy production.

“The United States and other Western economies have deployed a set of very potent financial weapons against Russia at remarkable speed,” said Eswar Prasad, a professor of economics at Cornell University and a former International Monetary Fund official. “Cutting off access to global financial markets and to a country’s coffin of international reserves held in currencies of Western economies is tantamount to a crippling economic blow, especially for an economy like Russia’s, which is so heavily dependent on export earnings.”

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