Putin bans foreign currency export exceeding $10,000 as sanctions cripple Russia's economy

Russian President Vladimir Putin on Tuesday signed a decree that bans exporting more than $10,000 worth of foreign currency in cash and “monetary instruments” with effect from March 2.

The move comes in response to the crippling sanctions imposed on Moscow by western nations over its invasion of Ukraine, which this week tanked the ruble to -0.71 and sent Russians flocking to banks and ATMs, fearing the fate of their savings.

Other measures Putin ordered this week included obligating Russian exporters to sell 80% of their revenues in foreign currency, prohibiting residents from providing non-residents with foreign currency under loan agreements, and depositing foreign currency into foreign bank accounts.

Russia has witnessed a reverse of the three decades of investment by the West in the wake of its military offensive against Kyiv. With foreign governments and organizations launching sanctions after sanctions and locking banks out of the SWIFT money messaging system, foreign companies are looking to make an exit from the country.

Russia blocks foreign investments from leaving country

Witnessing a mass exodus of companies over its invasion of Ukraine, Russia on Tuesday, March 1, blocked foreign investments from leaving the country. Announcing the move, Russia's Prime Minister Mikhail Mishustin asked entrepreneurs to not fall under 'political pressure' when making decisions. 

The move came as the US and the European Union vowed to wage a "total economic and financial war" against Russia that will cause the "collapse" of its economy.

US, world impose financial sanctions on Russia

The United States on February 28, cut off the Russian Central Bank and sanctioned state investment fund, in hard-hitting retaliation for Russia's invasion of Ukraine. The White House announced that the US along with its allies and partners are preventing Vladimir Putin from accessing his $630 billion war chest and fund his attacks on Ukraine.

President Joe Biden had announced that the US will impose a variety of economic sanctions targeting Russia's state-owned banks, high-end technology imports as well a number of wealthy elites and members of Putin's inner circle. The United Kingdom and the European Union had previously announced similar sanctions.

Earlier, the US and its allies announced the removal of select Russian banks from the SWIFT messaging system. Restrictions on the Russian Central Bank target its access to more than $600 billion (Rs 45,419.70 crore) in reserves the Kremlin has at its disposal. The sanctions took the Russian currency to its lowest level against the dollar in history.