European Union sanctions against Russia’s Central Bank have come into force after being published in the EU’s Official Journal in the early hours of Monday, news agency MIA informs.
They include a ban on transactions with the Russian financial institution, according to EU Commission President Ursula von der Leyen.
All of the bank’s assets in the EU will also be frozen in a bid to block financing for Russian President Vladimir Putin’s war against Ukraine.
The measure is considered just as hefty as the planned exclusion of Russian financial institutions from the SWIFT banking network.
The EU sanctions combined with those of its G7 partners mean around half of the financial reserves of Russia’s Central Bank will be frozen, EU foreign affairs chief Josep Borrell said Sunday evening.
According to experts, this means Russia will for example no longer be able to use its foreign currency holdings to stabilize the roubleThe Russian currency has already been weakened, which will bring further
hardship to Russia’s people.
The Russian currency has already been weakened, which will bring further hardship to Russia’s people. Not all of the Russian Central Bank’s reserves can be blocked, Borrell said, because they are not all in Western states.
The EU cannot block reserves in Moscow or China, for example, he said, and added that Russia has increasingly stashed its reserves in countries where they cannot be blocked. The exclusion of Russia from SWIFT is expected to come during Monday.
The EU also plans to impose further sanctions against Russia’s ally Belarus and against Russian oligarchs, business people and politicians. In a surprising move, Swiss President Ignazio Cassis said it was “highly likely” his government would decide Monday to freeze Russian assets in the country, Swiss news agency SDA reported. The possibility of following other countries in sanctioning Putin would also be on the table, Cassis said.
He added that any final decision about freezing capital would have to take Switzerland’s neutral status into consideration. Cassis had previously pointed to Swiss neutrality and said Switzerland would not impose sanctions despite Russia’s invasion of Ukraine.
Switzerland is an important financial center for Russians. Meanwhile, Russia’s Central Bank says it is barring traders from selling Russian securities held by foreigners as the domestic financial system faces tightened sanctions. It has also announced capital injections and foreign currency transactions intended to support domestic financial institutions.
Also, the Bank of Russia has decided to increase its key interest rate by 10.5 percentage points to 20% starting Monday, as the central bank responded to Western sanctions amid the Ukraine conflict.
A statement said that the move was designed to shield financial stability and protect the savings of citizens from depreciation.
