The United States announced on Monday that it is taking measures to block American dollar transactions from Russia’s central bank.
The move will also cut off Russia’s direct investment fund from US dollar transactions. CNN reported that the prohibition will deny Russia one of its main methods of working around new sanctions.
Senior Biden administration officials said that the announcement is aimed at removing Russia’s ability to use a “rainy day fund” that Moscow had been planning to access to shore up the falling ruble while the invasion of Ukraine took place.
But now Russia will lose access to the backup reserves it holds in American currency.
"No country is sanction proof. Putin's war chest of $630 billion in reserves only matters if you can use it to defend his currency, specifically by selling those reserves in exchange for buying the ruble,” a White House official told CNN. "After today's actions that will no longer be possible, and fortress Russia will be exposed as a myth."
A senior White House official said during a Monday morning phone call with the media that the action was "the culmination of months of planning and preparation across our respective governments across technical, diplomatic and political channels, including at the highest levels."
"We were ready and that's what allowed us to act within days, not weeks or months, of Putin's escalation," the official said.