February 5, 2023

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The United States is considering sanctions against Russia's central bank

The United States is considering sanctions against Russia’s central bank



Bloomberg: The United States is considering sanctions against Russia's central bank


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Bloomberg: The United States is considering sanctions against Russia’s central bank

WASHINGTON (Reuters) – The United States could consider imposing sanctions on Russia’s central bank, locals told Bloomberg News. The move would target the bulk of the $ 643 billion (over 70 570 billion) reserves that Russian President Vladimir Putin had accumulated before invading Ukraine.

No final decision has been made, but the Biden administration is exploring all options in an effort to prevent Putin from taking further action in Ukraine. The United States wants to partner with allies in Europe. It is unknown at this time what he will do after leaving the post. According to sources, the issue of dealing with the Russian central bank was raised in a conversation at the end of January.

Russia is gradually reducing its reliance on foreign currencies. However, at the end of June 2021, according to the latest official data, the central bank still held 16.4 percent of its dollar assets. It was 22.2 per cent in the previous year.

Iran and Venezuela

The United States has previously imposed sanctions on rival central banks. In 2019, the Ministry of Finance added financial officials from Iran and Venezuela to the blacklist for money laundering. North Korea’s central bank is also on the blacklist.

Loss of access to foreign funds may hinder the efforts of the Russian Central Bank to support the ruble in the foreign exchange market. This is made possible by hard currency sales. The direct intervention, announced earlier this week after Putin ordered his military to attack Ukraine, is the first time the Bank of Russia has entered the market since 2014.

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The United States is also considering banning Russia from the SWIFT financial news organization in connection with the invasion of Ukraine. Allies in Europe are also increasingly interested in the idea, which a few days ago seemed unlikely. The final decision in this regard is expected to take some more time.