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The Bank of Russia has imposed temporary restrictions on cash withdrawals from foreign currency deposits or accounts, to counter the sanctions from the West after the invasion of Ukraine, TASS reported.

The new restrictions, which will be imposed from 9 March 2022 to 9 September 2022, will cap cash withdrawals at $10,000. 

“All customer funds on foreign currency accounts or deposits are saved and accounted for in the deposit currency, the client can withdraw up to $10,000 in cash, and the rest of the funds – in rubles at the market rate on the day of issue,” the publication quoted the central bank as saying. 

Irrespective of the currency customers have in their accounts, they will be paid only in US dollars till the temporary restrictions are in place.

As per the regulator, nearly 90% of foreign currency accounts in Russian banks do not have more than $10,000, which means 90% of foreign currency deposits or accounts holders will be able to withdraw all their funds. 

The Russian central bank has also barred banks from selling currency cash to citizens till 9 September 2022, however, there is no cap on exchanging cash currency in rubles. 

The US and its NATO allies have targeted the economy with severe sanctions after Russia launched a military operation against Ukraine last month.

Other steps taken by Russia’s central banking regulator to counter these sanctions include raising the key interest rate to 20% and providing extra liquidity to lenders. 

Most recently, the regulator announced measures to help firms operating in the financial services market, Reuters reported citing the central bank.

The new measures, which are aimed at easing the regulatory and supervisory burden, include adjusting regulatory norms with new conditions in mind, increasing the duration to implement new rules among others.