AP Explains: The U.S. has joined European allies in dramatically escalating financial penalties against Russia over its invasion of Ukraine. Here's a look at what could amount to some of the toughest sanctions imposed on any nation in modern times.
The new restrictions that the United States, European Union and United Kingdom announced for Russia’s Central Bank would limit the Kremlin’s ability to access the more than $600 billion in reserves there. If the West is able to implement the Central Bank restrictions as it aims to, it will cripple Russia’s ability to keep the ruble from crashing in value amid the tightening Western sanctions.
Combined with the new SWIFT limits announced by Europe and the United States, the Central Bank measure is “likely to cause serious damage to the Russian economy and its banking system,” Lowery said. Western officials held off from including the SWIFT ban in the first rounds of sanctions, partly because of the collateral impact it would have on other economies that buy Russia’s oil and natural gas.
The targeted banks normally do tens of billions of dollars in business in dollars daily. The U.S. is now cutting them off from the U.S. financial system and U.S. dollar. The aim is to make the most ordinary business matters as well as international trade far more difficult for the banks, and Russia.
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