Disconnecting selected banks from the SWIFT international payment system or freezing the assets of the Russian central bank. These are probably the harshest measures the West could have chosen in retaliation for the Russian invasion of Ukraine.
The Russian ruble plunged by about thirty percent against the US dollar right over Monday morning. The Russian central bank responded by raising the base interest rate from the current 9.5 percent to 20 percent and, in coordination with the Russian Finance Ministry, decided to force the sale of foreign currency held by domestic companies. Russian entrepreneurs who have income from abroad have to forcibly convert 80 percent of that income into rubles.
During the afternoon, the ruble erased its losses slightly before another hard blow came from overseas. The U.S. Treasury announced an immediate ban on the Russian central bank’s handling of dollar reserves. The ruble did not react at first, but then started to lose again. Shortly before midnight CET, it traded near the 110 rubles per dollar mark, and was close to the morning level.
Meanwhile, the European Central Bank announced that the Austrian regulator has declared a moratorium on the European division of Russia’s Sberbank.
