Ruble plummets as sanctions bite, sending Russians to banks

Tyler Kustra, an assistant professor of politics and international relations at the University of Nottingham, said he couldn’t recall a similar example from the past of an economy brought to its knees by global sanctions. “This is the West causing a currency crisis for Russia,” said Kustra, who studies economic sanctions.

February 28, 2022

Ordinary Russians faced the prospect of higher prices and crimped foreign travel as Western sanctions over the invasion of Ukraine sent the ruble plummeting, leading uneasy people to line up at banks and ATMs on Monday in a country that has seen more than one currency disaster in the post-Soviet era.

The Russian currency plunged about 30% against the U.S. dollar after Western nations announced moves to block some Russian banks from the SWIFT international payment system and to restrict Russia’s use of its massive foreign currency reserves. The exchange rate later recovered ground after swift action by Russia’s central bank.

But the economic squeeze got tighter when the U.S. announced more sanctions later Monday to immobilize any assets of the Russian central bank in the United States or held by Americans. The Biden administration estimated that the move could impact “hundreds of billions of dollars” of Russian funding.

Biden administration officials said Germany, France, the UK, Italy, Japan, European Union and others will join the U.S. in targeting the Russian central bank.