Russian President Vladimir Putin has signed a decree on special economic measures in response to Western sanctions. According to a decree published on the Kremlin’s website, Russian citizens have been banned from making foreign currency transfers abroad since March 1.
In addition, Russian exporters will have to convert 80 percent of foreign exchange earnings accrued on residents’ accounts from January 1 into rubles and continue to maintain a liquidity ratio of 80 percent in rubles in the future.
The announcement of these drastic measures comes at a time when the Russian economy is trying to strengthen its defenses against sanctions imposed by Western countries in response to Moscow’s invasion of Ukraine.
The United States, the European Union and a number of other countries have announced that they will exclude some Russian banks from the international banking system SWIFT and suspend all transactions with the Russian central bank.
The latter measure aims to offset some of the huge foreign exchange reserves that Russia has accumulated in recent years, largely thanks to revenues from oil sales.
The sale of foreign currency is one of the main tools used by countries wishing to support their national currency. The ruble collapsed today against the dollar and the euro as markets opened, reaching record lows.
Western sanctions have already prompted Russia’s central bank to sharply raise its key interest rate to 20 percent today to curb inflation.
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