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Russia Erects Financial Defenses as Sanctions Hit Banks and Markets

“The ruble has ceased to be a freely convertible currency with the sweeping sanctions. In terms of currency policy, this throws Russia back to the early 1990s and the time before the country’s comprehensive economic opening.”

By Netty Ismail & Jana Randow | February 28, 2022 at 09:03 AM
Photo: Bank Rossii, Russia's central bank Photographer: Andrey Rudakov/Bloomberg

The Bank of Russia acted quickly to shield the nation’s $1.5 trillion economy from sweeping sanctions that hit key banks, pushed the ruble to a record low, and left President Vladimir Putin unable to access much of his war chest of more than $640 billion.

The central bank more than doubled its key interest rate, to 20 percent, the highest in almost two decades, and imposed some controls on the flow of capital. It was part of a barrage of announcements that eventually restored some calm after a rout that pushed some Russian Eurobonds into distressed territory last week.

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