capital controls were a tit-for-tat move after central bank reserves were frozen

© . FILE PHOTO: A Russian state flag flies over the Central Bank headquarters in Moscow, Russia March 29, 2021. REUTERS/Maxim Shemetov () for-tat movement in response to some of its reserves being frozen by western countries, said the regulator on Friday. Western sanctions against Russia for what Moscow calls “a special military operation” in Ukraine have limited the central bank’s ability to back the ruble with dollars and euros in its foreign exchange and gold reserves. “In response to the freezing of some of Russia’s reserves, Russia has also introduced restrictions on the movement of funds that can be transferred with a similar amount to unfriendly countries,” the central bank said in its first detailed explanation of the reasoning behind her decisions. These include capital flow restrictions, a ban on the sale of securities by foreign investors, a ban on withdrawing their money from the Russian financial system and the need to obtain special state approval to make payments to debtors from “unfriendly countries”. The sanctions froze about $300 billion of Russia’s $640 billion gold and forex reserves, the Treasury Department said earlier in March. Russia has some of its reserves in gold and 73.9 million troy ounces of the precious metal worth $132 billion as of Feb. 1. In recent years, the central bank has considered both the yuan and gold as part of its reserves to protect the economy in the event of geopolitical crises and Western sanctions. Russia “has therefore increased its share of gold and the Chinese yuan to nearly half of its reserves in recent years,” it said Friday. However, the United States said Thursday that gold-related transactions involving Russia could be sanctioned by US authorities, effectively limiting the central bank’s ability to use its gold reserves as well. The central bank did not comment in detail on its ability to use its gold reserves, but said they are currently on Russian territory. Disclaimer: Fusion Media would like to remind you that the data on this website is not necessarily real-time or accurate. All CFDs (Stocks, Indices, Futures) and Forex prices are not provided by exchanges but rather by market makers, and therefore prices may not be accurate and may differ from the actual market price meaning prices are indicative and not suitable for trading purposes . Therefore, Fusion Media does not bear any responsibility for any trading losses that you may incur as a result of using this data. Fusion Media or anyone associated with Fusion Media accepts no liability for any loss or damage resulting from reliance on any information, including data, quotes, charts and buy/sell signals on this website. Be fully informed about the risks and costs associated with trading the financial markets, it is one of the riskiest forms of investment possible.

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