In order to put further pressure on Russian President Vladamir Putin, the United States on Monday targeted Russia's central bank with new sanctions.
What Happened: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) blocked Americans from engaging in transactions with the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation.
"This action effectively immobilizes any assets of the Central Bank of the Russian Federation held in the United States or by U.S. persons, wherever located," OFAC said.
OFAC also announced sanctions against the Russian Direct Investment Fund, which has exposure to the U.S. financial system and is run by a known Putin ally, Kirill Dmitriev. Putin has relied on the Russian Direct Investment Fund for raising funds in the past.
By further restricting the Russian entities, the U.S. demonstrates its unwavering commitment to support Ukraine and to prevent Putin’s regime from raising capital to fund its invasion, the Treasury Department said in a statement.
"The unprecedented action we are taking today will significantly limit Russia’s ability to use assets to finance its destabilizing activities, and target the funds Putin and his inner circle depend on to enable his invasion of Ukraine," said Janet Yellen, Secretary of the Treasury.
Why It Matters: Russia's central bank initially delayed opening the Moscow Exchange by three hours Monday before announcing that it would remain closed for the day after sanctions intensified. The rouble fell to all-time lows Monday before pairing some of its losses following central bank foreign currency intervention and an emergency rate hike.
The turmoil has spread to global markets. Many Russian stocks that trade on the New York Stock Exchange and Nasdaq have been halted, including Yandex NV YNDX, QIWI PLC QIWI, Mechel PAO MTL, Ozon Holdings PLC OZON, HeadHunter Group PLC HHR and Nexters Inc GDEV.
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