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Russia-Ukraine War: Economic sanctions isolate Russia, Russian ruble plummets | Univision World News

Also Switzerland, a historically neutral country, announced harsh reprimands to Russian capital, being one of the banking systems preferred by the Russian oligarchies.

Here is a recount of the dark picture for the Russian economy, which under the influence of Western sanctions this Monday began to experience the isolation of the international financial system.

Russian ruble price plummets

Russia’s currency, the ruble, plunged nearly 30% against the US dollar on Monday. However, the exchange rate is unstable, it goes up and down, because to counteract the effects, the Central Bank of Russia has intervened to stop the fall.

How does it affect the Russians? This will make the population of Russia face the prospect of higher prices in their daily purchases as well as restrictions on travel abroad. In Moscow banks on Monday you could see long lines at banks and ATMs.

People in some European countries also rushed to withdraw money from subsidiaries of Russia’s state-owned Sberbank after it came under international sanctions.

At the government level, the Kremlin will have to intervene to support industries, banks and economic sectors in decline, but now without access to strong currencies such as the US dollar or the euro, which is likely to trigger ruble issuance, which would end translating into more inflation.

skyrocketing interest rates

The Central Bank of Russia immediately moved to try to stop the ruble from falling and made a drastic hike in its key interest rate in a desperate attempt to prop up the currency.

The bank raised the reference rate from 9.5% to 20%.

Russian securities abroad frozen

The decision of the Western forces this Sunday to freeze Russia’s foreign exchange reserves, an unprecedented measure that could have devastating consequences for the financial stability of the country, drastically raised the pressure on the ruble.

This is because the ability of the Russian financial authorities to support the currency through the use of capital was sunk, since there is practically no access to reserves outside their country.

It’s unclear exactly how much of Russia’s estimated $640 billion in hard currency, some of which is held outside that country, would be crippled. European officials were quoted as saying that at least half would be affected.

“This is a big step for Switzerland,” said President Ignazio Cassis. “Switzerland thus responds to serious violations of international law.”

Central Bank of Russia, isolated;

the stock market closed

After Western nations announced measures to block some Russian banks from the international payment system SWIFT (the worldwide system for interbank communications) and restrict Russia’s use of its huge foreign exchange reserves.

But this Monday, the economic pressure grew stronger: the US Treasury announced measures that freeze any assets held by the Russian Central Bank in the United States or held by any American.

The Treasury said that it is estimated that the measure could affect “hundreds of billions of dollars” of Russian funds and that this action is “unprecedented”.

Treasury chief Janet Yellen said the move 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.”

This action will severely limit Russia’s ability to defend the ruble and prop up its economy. Germany, France, the United Kingdom, Italy, Japan, the European Union and other countries will join in their action against the Russian Central Bank.

The Russian government announced that the Moscow stock exchange would remain closed on Monday in the face of the collapse of the ruble, and to prevent further bank runs.

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