Canadian financial institutions are now barred from doing any transactions with Russia‘s central bank — a key target for Western sanctions aimed at punishing Russian President Vladimir Putin for invading Ukraine.
Prime Minister Justin Trudeau announced the prohibition in a tweet on Monday.
He billed the move against the Russian central bank as one aimed at “eliminating its ability to deploy Russia’s international currency reserves and further restricting Putin’s ability to finance his war of choice.”
The Russian currency plummeted against the U.S. dollar as markets opened on Monday following several rounds of sanctions imposed over recent days over Russia’s invasion of Ukraine.
So far, the drop marks a 30 per cent slide in the value of the Russian currency relative to the U.S. dollar.
Russia was cut off from SWIFT over the weekend following an agreement among European and North American allies, marking a significant blow to Putin’s regime.
The system facilitates global financial transactions.
The move to ban transactions with the Russian central bank comes in concert with similar moves by allies. The United States on Monday announced a parallel ban in what Reuters described as a crushing blow to Russia’s economy.
The U.S. sanctions also bar transactions with Russia’s finance ministry and national wealth fund, and are expected to jack up Russian inflation, cripple its purchasing power and drive down investments.
“Our objective is to make sure that the Russian economy goes backwards if President Putin decides to continue to go forward with an invasion in Ukraine, and we have the tools to continue to do that,” a senior U.S. administration official said to Reuters on Monday.
The U.S. official on Monday said the measures “immobilized” any assets Russia’s central bank held in the United States in a move that will hinder Russia’s ability to access hundreds of billions of dollars in assets.
“Putin’s war chest of $630 billion of reserves only matters if he can use it to defend his currency, specifically by selling those reserves in exchange for buying the rouble,” a second senior administration official said to
“After today’s action, that will no longer be possible and ‘Fortress Russia’ will be exposed as a myth.”
With files from Reuters.
Comments