Russia's economy was trying to avert disaster Monday after feeling the effects of severe sanctions imposed following President Vladimir Putin's invasion of Ukraine.
Putin met with with his top economic advisers after the ruble crashed to a record low against the U.S. dollar, CNN reported. In fact, the value of one ruble actually fell below one U.S. cent on Monday.
Economists warned that the Russian economy could shrink by 5%.
Russia's central bank more than doubled interest rates to 20%, and the Moscow stock exchange, which closed for the day, will remain closed Tuesday.
Panicked customers rushed to withdraw deposits from the European subsidiary of Russia's biggest bank, putting it on the brink of collapse.
Norway's largest pension fund KLP said it planned to sell around $56 million worth of Russian stocks, and the Church of England said it had asked its fund managers to sell any Russian stocks last week.
The Institute of International Finance (IIF) said Monday that Russia was likely to default on its external debts and its economy will suffer a double digit contraction this year.
CNN reported that Putin's government spent the past eight years building up a war chest of $630 billion — including currencies and gold — in international reserves as a way to deal with tough sanctions. However, at least some of that money now is frozen.
"We will ... ban the transactions of Russia's central bank and freeze all its assets, to prevent it from financing Putin's war," European Commission President Ursula von der Leyen said in a statement Sunday.
President Joe Biden on Monday was leading another video conference with the European Union, Great Britain and other Western leaders to solidify a common package of sanctions that are unprecedented in scope and unity.
Brussels and Washington during the weekend announced financial sanctions within minutes of each other, all targeting the central bank and cutting Russia out of much of the SWIFT international financial transaction system.
"The ratcheting up of Western sanctions over the weekend has left Russian banks on the edge of crisis," wrote Liam Peach, an emerging market economist at Capital Economics, CNN reported.
The U.S. on Monday blocked Americans from engaging in any transactions involving Russia's central bank, National Wealth Fund and finance ministry.
Reuters and The Associated Press contributed to this story.
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