White House defends sanctions amid ruble rebound

The White House on Thursday defended the economic sanctions it used to punish Moscow for its invasion of Ukraine amid signs Russia’s currency has dramatically rebounded.

Russia’s currency was trading at about 84 rubles on Feb. 23, the day before Moscow attacked Ukraine. It plummeted by 70% by March 7 after two weeks of economic penalties imposed by the U.S. and its allies.

However, it has roared back to prewar levels as of Thursday afternoon because of the surge in oil and gas prices. Some of the sanctions included carve-outs for oil and gas, which in turn has boosted Russia’s economy.

President Biden earlier this month bragged that the sanctions had caused the Russian ruble to lose 50% of its value, saying that will make it difficult for Russian President Vladimir Putin to fund his war.

As the ruble regains its value, some have wondered if the sanctions were a failure. The penalties did not deter Mr. Putin from invading Ukraine, defying White House predictions earlier this year that sanctions would be a deterrent.

White House communications director Kate Bedingfield dismissed that criticism, accusing Russia of artificially inflating the ruble’s value.

Since the sanctions, Russia opened its stock market up for limited trading sparking a brief economic boost. It also barred commercial banks from selling dollars to customers, blocked foreign clients from selling securities and limited how many dollars Russians can withdraw from their bank accounts.

“What we are seeing here is an artificial propping up of the ruble by the Russian Central Bank and the Russian government,” Ms. Bedingfield said.

She added that the artificial steps by Russia show the ruble is no longer an adequate measure of the country’s economy. She said other signs point to trouble for Russia’s finances.

“Look at things like dramatic inflation in Russia, look at private investment pulling out of Russia,” she said. “If you look at Putin himself saying that the sanctions have imposed unprecedented costs, I think that’s a better metric of where the Russian economy is right now.”