WASHINGTON(Washington Insider Magazine) – On Monday, the Biden office emphasized the severity of financial sanctions imposed on Moscow over the weekend, during which the United States and its allies specifically aimed Russia’s Central Bank, blocking the Kremlin from trying to access any of its over $600 billion in cash reserves in the United States or in foreign currencies denominated in US dollars.
Officials claimed it was evident from the start of the Ukraine incursion that Russian President Vladimir Putin planned to utilize Central Bank holdings to soften the blow of sanctions.
Officials indicated that the penalties, which are a significant move for the Biden government, were issued during the weekend once it became evident that action was required before the trading opened on Monday.
Officials said the sanctions are the most serious the US Treasury has launched against a country with this size economy and assets, adding that the Russian Central Bank is significantly larger than Venezuela’s or Iran’s.
Officials wouldn’t say how much of the $630 billion “rainy-day fund” will be affected, but ABC NEWS reported that the US understands the Russian Federation’s Central Bank has its assets scattered throughout the world.
The measure essentially immobilizes any holdings of Russia’s Central Bank, according to the US Treasury, and will impede Russia’s efforts to prop up its fast-declining ruble.
According to one researcher, barring Moscow’s access to the SWIFT global financial system will have a greater impact. According to expert Eddie Fishman, this is a first-of-its-kind sanctions move, rendering ALL of the Russian administration’s rainy-day funds inactive.
State secretary Antony Blinken stressed in a statement that the measure was conducted in conjunction with European partners. Considering the technical and sophisticated nature of the new penalties, another observer said that the quickness at which the European Union and the United States responded, and in lockstep, was extraordinary.
Officials indicated the US and its allies will attempt to weaken Russia’s ability to be a major energy provider in the long run, possibly by preventing it from developing energy technology.
