Russia’s financial authorities are putting the economy on an “economic war” footing as sanctions bite

The sanctions based assault on Russia by the US and its expanding sanctions regime is starting to take its toll as the Russian government and financial authorities scramble to manage the damage that is now affecting everything from corporate profits to foreign currency reserves.

Earlier this month Russian Prime Minister Dmitry Medvedev likened the mushrooming sanctions regime to a “declaration of economic war” and the government has gone onto a war footing to prepare in case harsher measures come in the autumn.

The Central Bank of Russia (CBR) said it will stop its regular foreign currency purchases on domestic market from August 23 until the end of September 2018 in order to “increase the predictability of monetary authorities and lower the financial market volatility.”

CBR announced the measure as Russian assets come under mounting sanction pressure and investors are getting increasingly nervous. On August 23 Russian ruble declined to RUB69-RUB70 to US dollar on the news that the regulator might continue to purchase foreign currency despite ruble’s continuous weakening.

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By Ben Aris, BNE Intellinews