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The sanctions announced include cutting off Russia’s largest bank from the U.S. financial system – which is a significant blow to its ability to function and process global trade. It also includes full blocking sanctions on Russia’s second largest bank – freezing any of its assets touching the U.S. financial system. As a result, the U.S. expects that Russia’s ability to access global markets, attract investment, and utilize the U.S. dollar will be devastated.
Russia’s economy has already faced intensified pressure in recent weeks; just today its stock market sunk to its lowest level in four and a half years, and the ruble weakened beyond its weakest daily settlement price on record – before additional sanctions were even imposed. With these new stringent measures, these pressures will further accumulate and suppress Russia’s economic growth, increase its borrowing costs, raise inflation, intensify capital outflows, and erode its industrial base.
