Global: Russia Suspended From Bank for International Settlements

The Bank for International Settlements, known as the central bank for central banks, has suspended Russia from using its services following Western sanctions.

The move will prevent Russia’s central bank from accessing banking services at the Basel, Switzerland-based institution. Following Russia’s invasion of Ukraine, the U.S. and European Union blocked Russia’s central bank from utilizing about 40% of its $630 billion reserves.

Foreign reserves are by their nature held abroad, often in government bonds of other nations as well as at accounts with commercial banks and other nations’ central banks. The U.S. and European countries imposed sweeping sanctions on Russia in response to its invasion of Ukraine. Those strictures bar Russia’s central bank from conducting transactions with domestic banks in those countries, removing its ability to procure dollars and euros through selling its reserves.

Prior to the announcement by the BIS, economists said it was unclear whether the sanctions would prevent Russia’s central bank from accessing accounts and other services at the BIS.

“The Bank for International Settlements is following international sanctions against the central bank of Russia, as applicable, and will not be an avenue for sanctions to be circumvented,” a BIS spokeswoman said. “The access of the central bank of Russia to all BIS services, meetings and other BIS activities, has been suspended.”