Biden targets Russian Banks, Sovereign Debt in ‘First Tranche’ of Sanctions - ForexProp

ForexProp
23 Feb, 2022

President Joe Biden on Tuesday said the U.S. is sanctioning two Russian banks as well as the country’s sovereign debt, as he blamed Moscow for what he called the beginning of an invasion of Ukraine.

Biden called the sanctions the “first tranche” of such measures and said the U.S. “will continue to escalate sanctions if Russia escalates.”

Two Russian financial institutions, VEB and Russia’s military bank will be sanctioned, Biden said — making it difficult to do transactions in U.S. dollars DXY, 0.04%.

And the U.S. is targeting Russia’s debt so Russia “can no longer raise money from the West and cannot trade its new debt on our markets or European markets, either,” Biden said in remarks at the White House.

U.S. stock indexes SPX, -1.01% DJIA, -1.42% closed sharply lower Tuesday as investors reacted to Russian President Vladimir Putin’s decision to order troops to breakaway regions of Ukraine.

Economists believe that a war between Russia and Ukraine would not be a major risk to the U.S. economy.

Still, on Tuesday, oil futures CL.1, +1.32% were up about 1.3%, stocks DJIA, -1.42% fell in choppy trade and the yield on the 10-year Treasury TMUBMUSD10Y, 1.944% note rose.

Biden also said the U.S. would sanction Russian elites and their family members. “They share the corrupt gains of the Kremlin’s policies, and should share in the pain as well.”

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The five Russian individuals targeted, according to a White House statement, were Aleksandr Bortnikov and his son, Denis; Sergei Kiriyenko and his son, Vladimir; and Promsvyazbank CEO Petr Fradkov.

Biden spoke Tuesday after signing on Monday an executive order restricting American business in Ukraine’s breakaway regions, in response to Putin’s recognition of those areas.

“Who in the Lord’s name does Putin think gives him the right to declare new so-called countries?” Biden asked.

Following Biden’s speech, a senior administration official told reporters that the pain in Russia is mounting.

Noting the country’s stock market is down more than 30% since November, while the ruble has lost 10% over the same time period.

German Chancellor Olaf Scholz has suspended the certification process for the Nord Stream 2 natural-gas pipeline after Russia recognized separatist-held regions in eastern Ukraine.

The senior Biden administration official told reporters that energy prices are moving higher not because Nord Stream 2 is halted, but rather due to concerns that Putin will weaponize energy supply.