Ruble plummets as sanctions bite sends Russians To Banks

MOSCOW (AP) — 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 depositors 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 unprecedented 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 quick action by Russia’s central bank.

But the economic squeeze got tighter when the U.S. fleshed out the sanctions 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.

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

“We are in uncharted territory of throwing all these nuclear options of sanctions at Russia at the same time over the weekend,” said Elina Ribakova, deputy chief economist at the Institute of International Finance, a banking trade group. “Throwing them all together at once like this will have a very significant effect.”

Russians wary that sanctions would deal a crippling blow to the economy have been flocking to banks and ATMs for days, with reports on social media of long lines and machines running out. People in some central European countries also rushed to pull money from subsidiaries of Russia’s state-owned Sberbank after the Russian parent bank was hit with international sanctions.

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