People outside a currency exchange shop in Moscow on Saturday.Credit...Sergey Ponomarev for The New York Times
MOSCOW — The ruble cratered, the stock market froze and the public rushed to withdraw cash on Monday as Western sanctions kicked in and Russia awoke to uncertainty and fear over the rapidly spreading repercussions of President Vladimir V. Putin’s invasion of Ukraine.
As the day began, Russia’s currency lost as much as a quarter of its value within hours. Scrambling to stem the decline, the Russian Central Bank more than doubled its key interest rate, banned foreigners from selling Russian securities and ordered exporters to convert into rubles most of their foreign-currency revenues. It closed the Moscow stock exchange for the day because of the “developing situation.”
“The economic reality has, of course, changed,” the Kremlin’s spokesman, Dmitri S. Peskov, told reporters, announcing that Mr. Putin had called an emergency meeting with his top finance officials.
Even as Russian and Ukrainian delegations met for talks at the Belarus border, Moscow’s military offensive showed no sign of letting up, and the hectic moves offered the first signs that the sanctions imposed on Russia by the West over the weekend were shaking the foundations of Russia’s economy. The decisions by the United States, Britain and the European Union restricting the Russian Central Bank’s access to much of its $643 billion in foreign currency reserves have undone much of the Kremlin’s careful efforts to soften the impact of potential sanctions.
And with dozens of countries closing their airspace to Russian planes, major foreign investors pulling out and the West placing debilitating restrictions on Russia’s biggest banks, it was becoming clear that Mr. Putin’s invasion of Ukraine was ushering in a period of international isolation for Russia unseen since the Cold War.
“So, has Russia become Venezuela or is it still Iran?” the morning-show host on the liberal-leaning Echo of Moscow radio station asked an economist on Monday.
“We’ll go through the Iran phase,” Yevgeny S. Gontmakher of Moscow’s Higher School of Economics responded, referring to sanctions placed on Iran because of its plans for uranium enrichment, “but what happens after that is hard to say.”
Elvira Nabiullina, the widely respected governor of the Russian Central Bank, was expected to speak to the public at 4 p.m. Moscow time.
On Sunday, Mr. Putin called the West’s sanctions “illegitimate” in a televised meeting with his defense minister and top military commander. Mr. Putin then told them to place Russia’s nuclear arsenal on high alert; some analysts fear that Russia’s economic instability could lead Mr. Putin to escalate his conflict with the West using new military threats or other means, such as cyberattacks.
But there was also extreme uncertainty inside Russia as the value of people’s savings evaporated and the interconnections with the Western world that Russians had come to take for granted in the last three decades rapidly broke away. It was not immediately clear whether most Russians would blame Mr. Putin for the crisis — or whether they would take cues from Kremlin propaganda and blame the West.
“Times change, much has happened, but one thing has not changed,” a reporter on the state-run news channel Rossiya 24 said on Sunday. “When a united Europe tried to destroy Russia, this always ended up bringing about the opposite result.”
Ivan Nechepurenko contributed reporting.
Anton Troianovski is the Moscow bureau chief for The New York Times. He was previously Moscow bureau chief of The Washington Post and spent nine years with The Wall Street Journal in Berlin and New York. @antontroian
Well as we are all stuck in the snow I’ve decided to share this story, you can believe it or not, its up to you. It’s 1st March 2018, Putin is boasting about his toys of war, as are other leaders. Can we just put these things away and advance science for all Mankind instead? The best of all our people is in its Spirit. So let me tell Putin and Kim and Trump a story about real Spirit. This is the story of how Lech, Boris and Gregorgi rescued 100 old people trapped in a blizzard with medicine and food running out.
Now Popaloffoff lies somewhere in the East where Poland, Ukraine and Russia make love on the map. They make love in bed too but I’m just trying to give you an estimation of where it is. Up in the mountains along a winding road and perched like an eagle looking down on a fast flowing river is an old monastery that is also an old people’s home for locals. So priests and shepherds live there, the priest paint icons and the shepherds produce the finest vodka anywhere in the world, if you live in that climate you need a good drink.
This Winter 2017/2018 has been bad, today 1st March 2018 the weather is savage. Lech and Boris and Gregorgi got a call on the CB radio, Shepherd down, we are running out of supplies especially medicine. We may have to burn the icons to keep warm. Now to anybody in the East an icon is a Holy Holy thing, its worth more than gold, worth more than beating USA at the ice hockey. I’m whispering this now but an icon is worth more than Vodka.
So when the message came on the CB radio Lech, Boris and Gregorgi had to do something. The Blizzard could go to Hell, in fact it could kiss Gregorgi’s fat ass, and his ass was fat, very fat indeed. They mounted their snowploughs and drove to base. Grit was poured to over-brimming on all three trucks, and a trailer was attached to each. Not forgetting a case of vodka in each cabin. With a blessing from an atheist they departed.
Only a fool, a madman, and a believer would even attempt it in this weather, but that would describe the Trio. In Popaloffoff they got the message that help was on its way, then the CB died. So they huddled together and prayed. A few of the icons were near the fire for when the firewood ended. Now as I said before Saint Michael considers Lech, Boris and Gregorgi to be his friends. As for the icons they have special powers too, but more of that later.
Driving in a blizzard is no fun, the Trio laughed and joked and cursed at each other over the radio. They were on a mission, a mission from God. They were not Blues Brothers they were Slavic cousins, and they were better drivers. Slip sliding away they went, round and round a garden like a teddy bear one step two step and a tickle under there. Good job there was vodka on the seat beside them. It was barely above freezing inside the cab, though they had their furs to keep them warm. That bear had nearly killed them 10 years ago, but they had sworn an oath to high Heaven that if they did not die they would repay the favour. So now wrapped in that bear’s clothes it was time to repay that debt. Popaloffoff was calling them, I saved your 3 lives, now you must save the least of my brethren.
It was logical, well logical to a fool, a madman and a believer, they were each and all of those things. They had visited Popaloffoff when they were kids and it had made a big big impression, so now, they had to do it, they just had to answer the call. Slip sliding away, the trailers sliding like a puppet on a string.
Disaster almost struck. Lech was leading his plough veered to the left, then magically it shot to the right along the mountain road. Boris and Gregorgi swore they saw an angle appear and push his truck back on the road. Was it the vodka, it was hard to tell through all the snow. It was Saint Michael himself, he had skin in this game, as did all the angels and saint on the icons.
After that save, like a diving ice hockey player in the Olympic final, Saint Michael was joined by a multitude of angels. If their icons were burned it did not matter, saving the lives of a Trio such as Lech, Boris and Gregorgi did matter.
Now the road to Poploffoff is very dangerous and you an slip off and never be seen again, or until Spring comes and the snow melts. The wind howled and the snow fell. The vodka was drunk as the Trio drunk through the blizzard. How they stayed on the road nobody would ever know, but if you were an angel looking down you could see snow angels in the snow to the left and to the right as angels pushed the truck to keep it on the road. Hundreds of snow angels made in the snow by real angels. But you don’t believe me, do you? You think I’m drinking vodka?
The fire was burning low so the priest with tears in his eyes put an icon on the fire. Then he closed his eyes, he did not want to see his sin. 100 people and more huddled around a fire with their eyes closed, begging the angles and saints to forgive them for their sin. The angles and saints were crying, not for their icons but because they were humbled to see such Faith.
Lech, Boris and Gregorgi drove on the perilous road, slip, sliding away. They cursed each other more, to encourage each other more. Then a tragedy, the vodka was finished. They fell silent, not long to go now, they had to concentrate more, the road was at its most dangerous now. Saint Michael called for reinforcements, a wall of angels their wings outstretched with swords drawn lined the road. Nothing would prevent them from getting to Popaloffoff now, only the Devil himself had come to see what was happening, he had smelt the scent of burning icons.
While Saint Michael hacked at the Devil with his sword Lech’s truck went over the cliff. It was hanging half on and half off the road. Boris and Gregorgi slammed on the brakes on their trucks. He would be dead in seconds. Only then 3 enormous bears appears and pulled the trailer and truck back on the road. The bears disappeared to be replaced by a golden angel, a beautiful golden angel.
Nobody said anything they drove in silence up the mountain road to Popaloffoff. They entered the courtyard and ran to refectory where everybody had been gathered. Lech, Boris and Gregorgi handed out medicine and food and unpacked the supplies. A madman, a fool and a believer had saved the day.
The Trio looked about and could see the icons that had been put on the fire. But when they took them out they noticed something, they wiped the soot away and the icons were perfect, intact. Babushka asked the trio to follow her to where she had been painting a new icon. She turned the icon around, and there Lech, Boris and Gregorgi could see a golden angle with 3 bears on it.
I need a drink they said in unison. So they had a drink, a real good drink. In fact they were given the recipe for Popaloffoff vodka, so if you wonder why Lech, Bori and Gregorgi are in Warley Woods or any woods for that matter its is because they are attending to their still. Oh, and before I forget, I have an angel on my wall as I talk to you all. And as for golden angel icon with 3 bears on, that is on the wall in Putin’s private office, as well as a few bottles of Popaloffoff vodka. Pope Francis has been invited to Russia you know, maybe Putin will give him a photocopy of the icon, or just some Popaloffoff vodka.
People join a huge queue to use an ATM in Saint Petersburg on Sunday CREDIT: REUTERS/Anton Vaganov
The Kremlin is scrambling to stave off a run on Russian banks and a crash in the rouble after Western nations announced a barrage of punishing sanctions.
Russia’s central bank said it would provide unlimited funds to the country’s lenders and dramatically expand eligibility for loans as it was forced to reassure citizens that bank cards would continue to work normally.
It came as Russians raced to cashpoints and reports of the machines running out of banknotes.
“If I were Russian, I would take my money out now. Bank runs could begin in Russia on Monday,” Bill Ackman, the star US hedge fund manager, wrote on Twitter.
Elina Ribakova, the deputy chief economist at the Institute of International Finance, said: “Bank runs have started from the very first day of sanctions and have accelerated over the weekend.”
A Western coalition of the UK, US, EU and Canada said on Saturday night they would freeze the Russian central bank’s overseas assets and cut certain Russian banks off from the Swift system for international payments, in the heaviest sanctions to date against Vladimir Putin’s regime. Japan yesterday said it would join the move to disconnect Russia from Swift.
The measures are expected to send the rouble tumbling on Monday morning, as asset restrictions limit the Bank of Russia’s ability to continue propping up the currency. Russia has $630bn (£470bn) in foreign reserves, a large portion of which is held overseas.
Russians shared videos on social media on Sunday of long lines forming at cash points from dawn in Moscow and individuals waiting for empty machines to be refilled amid concerns that digital payments may stop working.
Economists at Evercore said that the sanctions could encourage Russia to introduce capital controls such as limiting withdrawals and the conversion of roubles into foreign currencies.
“These are actions designed to stop the ability of the CBR to support the value of the ruble and limit their support [of] other actors’ imports and debt repayments. The odds Russia turns to capital controls are increasing rapidly,” they said.
Russia’s central bank announced that it would take a series of drastic steps on Monday morning that will effectively pump unlimited liquidity into the country’s financial system.
“The Bank of Russia has the necessary resources and tools to maintain financial stability and ensure the operational continuity of the financial sector,” it said.
Citizens wait to withdraw cash from a branch of Alfa Bank in Moscow on Sunday CREDIT: AP Photo/Victor Berzkin
The central bank said Monday’s repo auction, in which it lends central bank funds out to lenders, would have no limit, having increased the limits in recent days. It also said it would expand the “Lombard list”, the type of collateral it is willing to accept, “in order to cover the possible needs of banks in current liquidity to the maximum”.
The bank sought to reassure Russians that the financial system would remain operational.
It said: “The Russian banking system is stable, has sufficient capital and liquidity to function smoothly in any situation. All customer funds on the accounts are saved and available at any time.
“Banking services are provided as usual. Bank cards of all banks in Russia also continue to work normally.” Last week, the Bank of Russia intervened in the currency markets for the first time since 2014 in an attempt to lift the rouble.
Markets are braced for a new round of turbulent trading on Monday in response to Mr Putin putting nuclear forces on alert and Germany outlining a dramatic expansion of military spending.
White House officials said the latest raft of sanctions were designed to send the rouble into “free fall” and send prices in Russia soaring.
Prominent Putin propagandist rages on live TV about losing his Italian villa – which is next to George Clooney’s – because of sanctions over Russia’s invasion of Ukraine
Vladimir Soloviev, 58, griped about losing access to two multimillion-dollar estates he owns in Lake Como due to sanctions that followed Russian invasion
‘Is this the Iron Curtain?’ said journalist and Putin propogandist Vladimir Soloviev, on the set of his late-night program The Evening With Vladimir Soloviev
Soloviev, a known anti-Ukrainian propagandist, complained about the backlash, comparing the treatment of Russians by other nations to the Cold War
He fumed: ‘All of a sudden, now they say: “Are you Russian? Then we will close your bank account, if it’s in Europe”‘
A prominent Russian TV host known for spreading anti-Ukrainian sentiment and propaganda publicly lamented losing access to his two multimillion-dollar Italian villas on TV due to sanctions spurred by Russia‘s invasion of the neighboring nation.
‘Is this the Iron Curtain?’ said journalist and Putin propogandist Vladimir Soloviev, on the set of his late-night program The Evening With Vladimir Soloviev on Friday, after learning new sanctions implemented by Italian officials would hinder his access to a pair of properties he owns off Lake Como – down the road from A-lister George Clooney.
‘I was told that Europe is a citadel of rights, that everything is permitted, that’s what they said,’ the Russian talking head, who for years has served as one of Putin’s most eminent mouthpieces, told a panel of pro-Russia pundits.
‘I know from personal experience about the so-called “sacred property rights,”‘ Soloviev, 58, asserted to the panel, who had been discussing the effects the ongoing conflict – which reached its fourth day Sunday and has left at least 245 Ukrainians dead – has had on Russian citizens.
However, upon learning the conflict would effect him and his assets personally after being hit with sanctions from Italian officials that forbid him from accessing his vacation homes – two expansive compounds valued in the tens of millions – the TV presenter went on an impassioned on-air tirade.
‘With every transaction, I was bringing paperwork demonstrating my official salary, income, I did it all,’ the host, known for condemning Europe and the West for their supposed perversion and decay, griped to his guests.
‘I bought it, paid crazy amount of taxes, I did everything. And suddenly someone makes a decision that this journalist is now on the list of sanctions. And right away it affects your real estate. Wait a minute. But you told us that Europe has sacred property rights!’
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‘Is this the Iron Curtain?’ said journalist and Putin propogandist Vladimir Soloviev, on the set of his late-night program The Evening With Vladimir Soloviev, after learning new sanctions implemented by Italian officials would hinder his access to a pair of properties he owns off Lake Como
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Pictured here is one of Soloviev’s properties, likely valued in the tens of millions. The estate boasts 14 rooms, five bedrooms, five bathrooms, a living room, a kitchen, an entrance hall, a boiler room and a pantry, as well as a 90-sq-m guest house with three guest rooms, two bathrooms, a cellar and a private, gated porch
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Pictured here is the second of Soloviev’s multimillion-dollar Italian estates, also in Lake Como
Sanctioned Russian TV host complains about losing his Italian Villa
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Taken aback by the restrictions, which officials said may evolve into the journalist losing the properties altogether if the conflict worsens, Soloviev fumed: ‘All of a sudden, now they say: “Are you Russian? Then we will close your bank account, if it’s in Europe.”‘
He went on: ‘And if it’s in England, you’re allowed to keep no more than a certain amount there. Why? Because you’re Russian,’
Renowned Russian economist Mikhail Khazin, 59, interjected: ‘And that’s if you have an old account. They won’t open a new one.’
Soloviev then offered the panel the dramatic comparison between the consequences leveled against Kremlin propogandists by countries against Russia’s occupation of the Ukraine, and the Cold War.
‘Is this the Iron Curtain?’ the host, who appeared visibly emotional during the strange appeal, asked.
Germany-based pundit Alexander Sosnovsky replied: ‘Yes, absolutely,’ before offering a contentious reclassification of the backlash Kremlin supporters are facing following their full-scale military invasion of Ukraine.
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News presenter Soloviev, one of Putin’s most used mouthpieces, complained on-air Friday about losing access to the properties as a result of sanctions imposed by Italian officials following Russia’s invasion of the Ukraine – which has already resulted in 245 Ukrainian deaths
‘The Iron Curtain in its worst manifestation,’ the commentator said. ‘Painted in LGBT colors.’
Soloviev and the other panelists proceeded to nod in agreement, without mention of the effects the ongoing military occupation has had on Ukrainian citizens.
In 2019, Soloviev and other Kremlin propagandists came under scrutiny after a report by famed Putin rival and Russian anti-corruption activist Alexei Navalny revealed the longtime NTV host had not one, but two multimillion-dollar properties just down the road from Clooney’s $100m estate on the historic Italian lake.
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In 2019, Soloviev and other Kremlin propagandists came under scrutiny after a report by a Putin opposer and Russian anti-corruption activist revealed the existence of the longtime NTV host’s multimillion-dollar properties
Last Christmas, Navalny’s investigative team, FBK, videotaped the state TV host’s luxury abodes using a combination of drones and on-foot lensman, leaving the presenter Ukrainian chocolates – a jab at Soloviev’s repeatedly recorded use of anti-Ukrainian propaganda.
Soloviev subsequently became enraged with the grass-roots activist team’s reputation-damaging report, publicly calling it an ‘outrageous privacy violation.’
Later that year, Navalny was poisoned by nerve agent, which he blamed on the Kremlin. Russian authorities denied any involvement.
Navalny subsequently spent five months recovering in Germany, but was arrested upon his return to Russia and ordered to serve 2 1/2 years in prison, for what Russian officials said was for violating the terms of a suspended sentence stemming from a 2014 fraud conviction.
He is currently serving his sentence, and has since been branded a ‘terrorist’ by the Kremlin.
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