Punishing sanctions imposed by the United States and its allies on Moscow for invading Ukraine are pushing Russia into recession and starting to turn it back into a closed economy, a senior U.S. Treasury official said Friday.
The official, speaking on condition of anonymity, told reporters that the Treasury sees Russia as struggling with steep inflation, diminished exports and shortages despite a recovery of its ruble against the dollar. The official dismissed the rebound as driven by stringent capital controls and foreign exchange curbs, not market forces.
Inflation that has run as high as 6% over the past three weeks is a better indication of the sanctions' performance inside Russia, revealing the ruble's diminished purchasing power, the official said, adding that black market ruble exchange rates were well below the international rate.