Economic measures that have been undertaken against Russia by Western interests in response to Vladimir Putin’s invasion of Ukraine appear to be having serious effects. As summarized by The New York Times, “The ruble cratered, the stock market froze and the public rushed to withdraw cash on Monday as Western sanctions kicked in and Russia awoke to uncertainty and fear over the rapidly spreading repercussions” of the attack on Ukraine. Within hours, Russian currency lost up to a quarter of its value according to the Times, and amid other moves taken inside Russia to try and stem or at least make sense of the financial losses, the Moscow stock exchange abruptly closed for the day on Monday.
Hundreds of billions of dollars worth of foreign currency reserves held by Russia’s central bank have been restricted by interests including the United States and the United Kingdom. The Times summarized that “with dozens of countries closing their airspace to Russian planes, major foreign investors pulling out and the West placing debilitating restrictions on Russia’s biggest banks, it was becoming clear that Mr. Putin’s invasion of Ukraine was ushering in a period of international isolation for Russia unseen since the Cold War.” President Joe Biden recently discussed the U.S.’s part in those economic penalties at the White House, where he said that U.S. authorities were “going to stunt the ability to finance and grow the Russian military,” adding: “We’re also blocking four more major banks. That means every asset they have in America will be frozen. This includes VTB, the second-largest bank in Russia, which has $250 billion in assets.” He made those remarks last Thursday.
European Commission President Ursula von der Leyen, a European Union leader, added over the weekend that her side would “ban the transactions of Russia’s central bank and freeze all its assets, to prevent it from financing Putin’s war.” The “weekend’s events now mean that no G7 banks will be able to buy Russian rubles, sending the currency into free-fall, with the end result we could see a huge inflationary shock unfold inside Russia,” according to Michael Hewson, chief market analyst at CMC Markets UK. With the value of Russian currency falling, obtaining goods from outside the country is also poised to become more difficult, further isolating Russia’s economy. Russian and Ukrainian teams began talks on Monday over potentially ending the war, but in the meantime, Russia is keeping up its military assault on Ukraine, where at least hundreds of civilians have died and over half a million have been displaced. Ukrainian authorities claim to have already killed thousands of Russian soldiers amid the fighting, which has targeted areas including Ukraine’s capital city, Kiev.
Russia's losses as of Feb. 28, according to Ukraine's Defense Ministry. pic.twitter.com/4rljqtXikf
— The Kyiv Independent (@KyivIndependent) February 28, 2022
