As the Russian ruble continues its tumble against the dollar, President Barack Obama plans to sign a bill imposing new sanctions against Moscow, adding more pressure to a Russian economy already headedtoward recession.
White House press secretary Josh Earnest said on Tuesday, Dec. 16, that though the president has concerns about the Ukraine Freedom Support Act of 2014, the legislation gives Obama the “flexibility” to impose new punishment on Russia for its actions in eastern Ukraine.
The bill authorizes the president to send arms to Ukraine but does not require him to do so. It also levies new penalties on Russia’s energy and defense sectors.
U.S. and European sanctions, combined with record-low oil prices, havehammered the Russian economy. In a desperate move Tuesday, the Russian central bank imposed a massive interest-rate increase from 10.5 percent to 17 percent.
The move did little to stem the ruble’s fall. Russia’s currency is now at its lowest level since 1998 and has lost more than half its value against the dollar. Russia’s GDP could decline as much as 4.5 percent in 2015 if oil prices don’t rebound.
Russian officials are now bracing the public for fallout. Russian Deputy Prime Minister Olga Golodets said on Tuesday that an increase in poverty is inevitable. Russian President Vladimir Putin himself has also publicly acknowledged Russia’s economic woes, but blamed them on “speculators” trying to undermine Russian sovereignty.