© TASS
Russia: Rossiya Bank headquarters in St Petersburg
MOSCOW (77WABC) — Russia’s financial system is in chaos.
Financial sanctions imposed by the U.S., western allies, the United Kingdom and the European Union are crippling the ruble following Russia’s invasion of Ukraine. The ruble plunged Monday after the us and its allies cut Russia off from roughly $600 billion in reserves held by the central bank of Russia and cut ties to swift the global financial banking system.
“Everyone in the economic sphere, the banking sphere, knows we’re in new territory here—a coordinated shutdown of a country’s economy with the strongest arrow being in the heart of the banking sector,” George Lopez, expert on economic sanctions at University of Notre Dame’s Keough School of Global Affairs, told The Hill.
The sanctions also cut off Russia from access to the U.S. Dollar as its value climbs. The U.S. and EU are also barring certain Russian banks from access to the Society for Worldwide Interbank Financial Telecommunication (SWIFT), a messaging system used by banks to conduct transactions.
Roughly $300 billion of Russia’s reserves are now locked away from Putin in the U.S., Europe, and other countries. While Russia still holds billions of dollars worth of gold within its borders, experts say Moscow will find few willing buyers with its banks under their own crushing sanctions.
