Biden’s harsh new sanctions are aimed at crippling Putin’s defenses

Ever since the United States and its allies announced sanctions against Russia to halt its invasion of Ukraine, the effort faced a big unknown. What if Vladimir Putin has already insulated himself from their effects — by building up reserves protecting the ruble and with repressive measures protecting himself politically — rendering any such onslaught moot?

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Freezing transactions with the central bank and disconnecting it from the global financial system, the second official said, “will significantly hinder their ability to do that.”

The idea here, notes Edward Fishman, a senior fellow at the Atlantic Council and former State Department official, is that Putin hoped to use those dollar reserves to buy rubles and ruble-backed assets. Fishman says Putin aimed to “prop up the value of the ruble” by “artificially creating demand” for it.

“He will be effectively barred from using his war chest to stem the currency crisis,” Fishman told me,” which could have “ripple effects across the entire economy.”

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