President Joe Biden’s administration on Monday banned U.S. people and companies from doing business with the Russia’s central bank, the Russian National Wealth Fund and the Ministry of Finance, according to Bloomberg.
The moves by the U.S. Treasury’s Office of Foreign Assets Control will effectively immobilize any Russian central bank assets held in the U.S. or by U.S. nationals, according to a Treasury department statement.
The U.S. also announced new penalties on a key Russian sovereign wealth fund, the Russian Direct Investment Fund, and its Chief Executive Officer, Kirill Aleksandrovich Dmitriev, a close ally of Russian President Vladimir Putin.
The announcements marked the latest blow in the West’s financial onslaught against Russia following Putin’s invasion of Ukraine.
“The unprecedented action we are taking today will significantly limit Russia’s ability to use assets to finance its destabilizing activities, and target the funds Putin and his inner circle depend on to enable his invasion of Ukraine,” Treasury Secretary Janet Yellen said in a statement.
The fierce economic sanctions imposed by the United States and its allies on Russia’s central bank and other key sources of wealth are likely to drive Russian inflation higher, cripple its purchasing power and drive down investments, U.S. officials said on Monday as new sanctions took effect, Reuters reports.
The move comes after the United States and its allies last week imposed several rounds of sanctions targeting Moscow, including against Russian President Vladimir Putin and Russia’s largest lenders, after the country’s forces invaded Ukraine in the biggest attack by one state against another in Europe since World War Two.