Russia’s economy has taken a hit and the Ruble has dropped to a two-year low against the dollar.
This is the lowest level it has dropped to since 2022 after Russia’s new sanctions on Gazprombank put investors off.
Until last week, Gazprombank had been the last major Russian bank that the US hadn’t yet blacklisted.
Russia launched a hypersonic missile against Ukraine, and shortly afterwards, new sanctions were enacted against Russia.
Restrictions will now be imposed on Gazprombank’s ability to participate in global financial trade.
This will prevent the bank from handling transactions related to energy trade which will mean European customers are unable to pay for Russian gas.
Moscow’s economy has been increasingly weakened by the Ukraine war. Last year, Russia’s energy revenue fell by nearly a quarter due to a cap on Russian oil.
On Monday, Russia‘s ruble was trading at 105 against the dollar, its lowest level since the war began.
On Thursday, Russia fired a new hypersonic ballistic missile called the “Oreshnik” into Ukraine after Ukraine fired US ATACMS and British-made Storm Shadow missiles into Russia.
In total, the ruble-dollar exchange has fallen by 14% this year.
The country has high interest rates, but high inflation persists, and prices for essentials such as milk, potatoes, and butter are soaring, hitting Russians hard, according to a report produced by Western-aligned Russian broadcaster Current Time.
Since 2022, Russia has prioritised military spending, including military equipment, expenditure on weapons, higher military salaries, and one-time payments to military families.
