The US is cutting off Russia's central bank from US dollar transactions. Here's what to know

All right. I just have one item for all of you at the top following a television telephone conversation President biden held with uh european commission. President Ursula von der Leyen and an alignment with the decision by our european allies, The United States will join them in sanctioning President Putin and Foreign Minister Lavrov and members of the Russian national security team. I expect we'll have more specific details out later this afternoon in this moment. Um the I've conveyed pretty clearly, the President has no intentions at this moment to engage with President Putin. Uh he was just sanctioned. We just made a decision in coordination in close lockstep with the Europeans to sanction him a head of state. That is a very rare step to take. And obviously we've issued significant sanctions that cover 80% of the financial sector. So no, we're not in a business as usual moment at this point in time. And obviously de escalation would help return us to a state where that could proceed. The White House. Right now, believe that President Zelensky is safe in key. If we are in close touch with him or I'm not going to give you updates on his security uh State. We certainly the President just spoke with him earlier today and he continues to be the President of Ukraine. President Zelensky last night. Party # one of the Russian military because the United States have, we have a warning to Russia in the event that that they were to target the Ukrainian president or attempt to capture him or to physically harm him. Do we have a warning to them? Well, well, let me first say that we have been warning for months, uh, that uh, for weeks, if not months, that key falling that attempts to overturn the leadership of Ukraine is very much in the aspirations of President Putin. Uh, so his their attempts to do exactly that and they're uh continued progress in moving toward Kiev and moving toward Ukrainian leadership is aligned with what we have predicted. Obviously, going after the head of state would be a significant um horrific act by Russian leadership. But we remain in contact as you all have seen from the readout we provided with President Zelensky, He's made clear that he's still in Ukraine, proudly and courageously standing up in the face of the Russian attack. And we are certainly continue to be concerned concerned about the ongoing Russian assault.

Video above: U.S. joins allies imposing sanctions on Putin, LavrovThe U.S. is taking immediate action on Monday to prohibit American dollar transactions with the Russian central bank and fully block the Russian direct investment fund, senior administration officials said, an aggressive move that aims at some of Russia's most powerful means of mitigating the effect of sanctions.The steps are meant to prevent Russia from accessing a "rainy day fund" that officials said Moscow had been expecting to rely upon during the invasion of Ukraine. Instead of using the reserves to buffer a plummeting ruble, Russia will no longer be able to access the funds it keeps in U.S. dollars.The sweeping new sanctions — taken with Germany, France, the UK, Italy, Canada, the European Union and others — come as Russia's economy is already in freefall."No country is sanction proof," a White House official said. "Putin's war chest of $630 billion in reserves only matters if you can use it to defend his currency, specifically by selling those reserves in exchange for buying the ruble.""After today's actions that will no longer be possible, and fortress Russia will be exposed as a myth."In a phone call with reporters Monday morning, a senior administration official said the move was "the culmination of months of planning and preparation across our respective governments across technical, diplomatic and political channels, including at the highest levels.""We were ready and that's what allowed us to act within days, not weeks or months, of Putin's escalation," the official said."Our strategy, to put it simply, is to make sure that the Russian economy goes backward as long as President Putin decides to go forward with his invasion of Ukraine," a second senior administration official said.In a bid to mitigate the impact of the sanctions on U.S. and European energy consumers, the Treasury Department will exempt most energy-related transactions from the sanctions, a significant carve-out in the sanctions.One official called the ongoing sanctions a "vicious feedback loop that's triggered by Putin's own choices and accelerated by his own aggression."The sanctions also fully block the Russian Direct Investment Fund and its CEO, Kirill Dmitriev. Officials said they were "symbols of deep seated Russian corruption and influence peddling globally.""Today's actions represent the most significant actions the U.S. Treasury has taken against an economy of this size and assets of this size," another official said. "What also makes this asset significant is not just the amount of assets or the size of the country we're targeting, but the speed at which our partners and allies have worked with us to enact this response."Asked about potential additional sanctions on Belarus, which appears poised to elevate its role in Russia's invasion of Ukraine, an official said the U.S. is watching events "very carefully" and that sanctions on Belarus would "continue to ratchet much higher."

Video above: U.S. joins allies imposing sanctions on Putin, Lavrov

The U.S. is taking immediate action on Monday to prohibit American dollar transactions with the Russian central bank and fully block the Russian direct investment fund, senior administration officials said, an aggressive move that aims at some of Russia's most powerful means of mitigating the effect of sanctions.

The steps are meant to prevent Russia from accessing a "rainy day fund" that officials said Moscow had been expecting to rely upon during the invasion of Ukraine. Instead of using the reserves to buffer a plummeting ruble, Russia will no longer be able to access the funds it keeps in U.S. dollars.

The sweeping new sanctions — taken with Germany, France, the UK, Italy, Canada, the European Union and others — come as Russia's economy is already in freefall.

"No country is sanction proof," a White House official said. "Putin's war chest of $630 billion in reserves only matters if you can use it to defend his currency, specifically by selling those reserves in exchange for buying the ruble."

"After today's actions that will no longer be possible, and fortress Russia will be exposed as a myth."

In a phone call with reporters Monday morning, a senior administration official said the move was "the culmination of months of planning and preparation across our respective governments across technical, diplomatic and political channels, including at the highest levels."

"We were ready and that's what allowed us to act within days, not weeks or months, of Putin's escalation," the official said.

"Our strategy, to put it simply, is to make sure that the Russian economy goes backward as long as President Putin decides to go forward with his invasion of Ukraine," a second senior administration official said.

In a bid to mitigate the impact of the sanctions on U.S. and European energy consumers, the Treasury Department will exempt most energy-related transactions from the sanctions, a significant carve-out in the sanctions.

One official called the ongoing sanctions a "vicious feedback loop that's triggered by Putin's own choices and accelerated by his own aggression."

The sanctions also fully block the Russian Direct Investment Fund and its CEO, Kirill Dmitriev. Officials said they were "symbols of deep seated Russian corruption and influence peddling globally."

"Today's actions represent the most significant actions the U.S. Treasury has taken against an economy of this size and assets of this size," another official said. "What also makes this asset significant is not just the amount of assets or the size of the country we're targeting, but the speed at which our partners and allies have worked with us to enact this response."

Asked about potential additional sanctions on Belarus, which appears poised to elevate its role in Russia's invasion of Ukraine, an official said the U.S. is watching events "very carefully" and that sanctions on Belarus would "continue to ratchet much higher."

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