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Russia vs Ukraine: President Vladimir Putin unable to access much of his war chest of more than $640 billion.

The Bank of Russia acted quickly to shield the nation’s $1.5 trillion economy from sweeping sanctions that hit key banks, pushed the ruble to a record low and left President Vladimir Putin unable to access much of his war chest of more than $640 billion.

The central bank more than doubled its key interest rate to 20%, the highest in almost two decades, and imposed some controls on the flow of capital. It was part of a barrage of announcements that eventually restored some calm after a rout that pushed some Russian Eurobonds into distressed territory last week.

Russia vs Ukraine

“The Bank of Russia will be very flexible in using all necessary instruments,” Governor Elvira Nabiullina said in brief televised remarks in Moscow.

Facing the risk of a bank run, a rapid sell-off in assets and the steepest depreciation in the ruble since 1998, policy makers banned brokers from selling securities held by foreigners starting Monday on the Moscow Exchange. Exporters were ordered to start mandatory hard-currency revenue sales and stock trading was temporarily suspended in Moscow.

“The ruble has ceased to be a freely convertible currency with the sweeping sanctions,” said Friedrich Heinemann, head of the corporate taxation and public finance department at German think thank ZEW.

“In terms of currency policy, this throws Russia back to the early 1990s and the time before the country’s comprehensive economic opening.”

Less than a week after Putin ordered his military to invade Ukraine, Russia is at risk of succumbing to the biggest financial crisis of his more than two decades in power. He gathered Nabiullina and other top officials in the Kremlin to discuss plans for a response, calling the U.S. and its allies who joined in the sanctions “the empire of lies.”

The steps taken so far on Monday represent the most forceful measures by Russia after the latest round of sanctions, with the U.S. and the European Union agreeing to block access to much of the $640 billion the country’s central bank has built up as a buffer to protect the economy.

Additional measures taken by global governments to exclude some Russian banks from the SWIFT messaging system could further choke up the country’s banking system. Sanctioned institutions dominate Russia’s financial sector with $1 trillion in assets.

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