Tags: russia central bank | liquidity | sanction response

Russia Shores Up Banks With Extra Liquidity

Russia's central bank

Central Bank of the Russian Federation, Moscow (Dreamstime)

Wednesday, 02 March 2022 12:13 PM EST

Russia has responded to sanctions over its invasion of Ukraine with a range of measures to shore up its economic defenses and retaliate against Western restrictions.

Russia calls its actions in Ukraine a "special operation" that it says is not designed to occupy territory but to destroy its southern neighbor's military capabilities and capture what it regards as dangerous nationalists.

Below are some of the key steps Moscow has taken.

CENTRAL BANK MOVES

Russia's central bank has more than doubled its main lending rate to 20% and provided extra liquidity to banks. It intervened on the foreign currency market to support the rouble, before sanctions limited its ability to do so.

The Bank of Russia also banned Russian brokers from selling securities held by foreigners, coupon payments for foreign investors holding rouble-denominated sovereign debt and dividends to overseas shareholders in Russian companies.

CURRENCY CONVERSION ORDER

A decree by President Vladimir Putin ordered exporting companies, which include some of the world's biggest energy producers, to sell 80% of their foreign currency revenues to buttress the rouble.

CURBING ASSET SALES

Prime Minister Mikhail Mishustin said Russia would temporarily stop foreign investors from selling Russian assets to ensure they take a considered decision, not one driven by political pressure, but did not elaborate.

RAINY-DAY FUND

Russia will use money from a rainy-day fund to limit borrowing as sanctions made it more costly, Finance Minister Anton Siluanov said. The National Wealth Fund stood at $175 billion as of Feb. 1.

A government decree also showed the fund would spend up to 1 trillion roubles ($9.45 billion) to buy shares in Russian companies.

TAX RELIEF, TECH SUPPORT

Prime Minister Mishustin said Russia would provide additional support to technology companies and may tweak tax arrangements for businesses and households affected by sanctions.

The government will also allocate additional funds to small and medium-sized businesses via a subsidized lending scheme.

AIRSPACE CLOSURES

Russia has banned airlines from countries including Britain, Bulgaria, Poland and the Czech Republic from its airspace after similar moves by those countries.

($1 = 105.8450 roubles) (Reporting by Reuters; Editing by Sandra Maler)

© 2025 Thomson/Reuters. All rights reserved.


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Russia has responded to sanctions over its invasion of Ukraine with a range of measures to shore up its economic defenses and retaliate against Western restrictions.
russia central bank, liquidity, sanction response
349
2022-13-02
Wednesday, 02 March 2022 12:13 PM
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