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US Dollar Transactions Suspended by Russian Central Bank
Due to the continuous invasion of Ukraine, Russia is facing repercussions in the form of sanctions, penalties, and restrictions imposed by several major developed nations. The recent stringent action taken by the United States involves completely halting US dollar transactions with the Russian Central Bank, a bold move aimed at preventing Russia from retaliating against the existing sanctions.
As per statements from White House officials, Moscow holds a significant reserve of USD that it could utilize to support the government and military operations if the Russian ruble devalues. With the impact of sanctions and other factors, the ruble’s value has indeed fallen. However, with the Russian Central Bank losing access to USD transactions, they are unable to tap into this emergency fund.
“No nation is immune to sanctions,” stated a White House representative. “Putin’s financial reserves of $630 billion are only effective if they can be employed to stabilize the currency, specifically by selling these reserves to acquire rubles.”
The U.S. Treasury Department has implemented fresh sanctions targeting the Russian central bank and state investment funds in response to Russia’s invasion of Ukraine.
These sanctions coincide with a sharp decline in the ruble, experiencing a 30% drop on Monday. https://t.co/kxTQtiFUWv
— The Associated Press (@AP) February 28, 2022
During a teleconference, a senior government official elucidated that this action was the “result of extensive planning and coordination among our respective administrations through technical, diplomatic, and political means, including at the highest echelons.”
“We were well-prepared, enabling swift action within days, rather than waiting weeks or months after Putin’s escalation,” mentioned the official.
“Simply put, our goal is to ensure a regression in the Russian economy for as long as President Putin persists with his Ukrainian invasion,” emphasized another senior official from the administration.
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