US Treasury Issues Ban on Freezing Russian Central Bank Assets

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US Treasury Issues Ban on Freezing Russian Central Bank Assets By Hannah Perez

The US has issued new sanctions on Russia. This time prohibiting its companies and citizens from any transaction with the Bank of Russia and other key entities of the European country.

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The US government has banned US individuals and companies from doing business with the Bank of Russia, the Russian National Wealth Fund, and the Ministry of Finance.

The US Treasury Department announced this Monday in a Press release which has banned transactions with the Russian Central Bank and has imposed sanctions on a key Russian sovereign wealth fund. As a result, US entities and citizens will be barred from conducting financial transactions with Russia.

this action effectively immobilizes any assets of the Central Bank of the Russian Federation in the United States or by American personswherever they are“said the Treasury’s Office of Foreign Assets Control (OFAC).

OFAC has also sanctioned the Russian Direct Investment Fund (RDIF), which has exposure to the US financial system, and its CEO, Krill Dmitriev, a close ally of Russian President Vladimir Putin. “The Russian president and his inner circle of cronies have long relied on RDIF and Dmitriev to raise funds abroad, including in the United States.”.

The agency noted that the measures seek to prevent the Putin regime from increasing its capital to finance its invasion of Russia. For her part, US Treasury Secretary Janet Yellen added that, in collaboration with allied countries, the North American nation was fulfilling its commitment to block Russia.

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 inner circle rely on to enable their invasion of Ukraine.

US and allies sanction Russia

US freezes on Russian central bank assets will tie up almost half of Putin’s wealth, according to a Treasury spokeswoman who was quoted by Bloomberg. About 13% of the central bank’s reserves are in China, he said.

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According to that publication, which spoke with Treasury officials, Putin’s reserves are estimated at $630 billion and the measures are aimed at blocking his ability to sell them to mitigate internal financial pressure. Russia’s own data released in January shows that $100 billion of reserves were held in US dollars through June.

The announcement is the latest in a series of economic sanctions imposed on Russia following its armed invasion of Ukraine last week. On Saturday, the US, UK, Canada and the European Union said they would block major Russian banks from the SWIFT system. Countries have also issued sanctions on Putin and other top officials.

The movements have had a devastating effect on the Russian ruble, which began to fall to historical lows against the dollar since the armed conflict began. This Monday, the sovereign currency of Russia has fallen a further 40%, according to CoinDeskwhich has forced the Russian central bank to boost actions to protect the economy increasing your benchmark interest rate from 9.5% to 20%. The authority also imposed some controls on the flow of capital.

Meanwhile, Russian banks are at risk of collapse. The shares of major banks such as Sberbank and VTB have collapsed on the London Stock Exchange. The share prices of other large companies in the country also show sharp falls of up to 50%, according to what was collected TrustNodes.

Ads take place amid talks between Russian and Ukrainian officials in Belarus aiming to end the conflict. Although he has been skeptical, Ukrainian President Volodymyr Zelenskiy said he was willing to try to negotiate if it meant any chance of peace.

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Article by Hannah Estefanía Pérez / DailyBitcoin

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