Massive Western Financial Sanctions Pummel Russia, Ruble Plunges and Capital Controls Begin

In February and March 2022, the unprecedented financial sanctions imposed by Western nations on Russia delivered a devastating shock to the Russian economy and financial markets in Moscow. The Russian Ruble plummeted to a historic low against the U.S. dollar, the stock market was forced to close for weeks, and international rating agencies downgraded Russia's sovereign credit rating.

To counter the sanctions and capital flight, the Russian Central Bank was forced to dramatically raise its benchmark interest rate to 20% and impose strict capital controls, restricting citizens' withdrawal of foreign currency to stabilize the domestic financial system. For conservatives, while the scale and speed of the sanctions were notable, their long-term effectiveness depended on the West's own independence from Russian energy supplies. They warned that sanctions could also push Russia to accelerate de-dollarization efforts with non-Western partners like China.