Bank of Russia Said to Keep Sanctioned Lenders Off Long Dollars

Russian banks are finding little help at home from the toughest sanctions imposed against their country since the Soviet era as officials seek to avoid cash moving through foreign markets being seized.

The central bank and the Finance Ministry have curbed the access of the nation‘s biggest banks to dollars in line with restrictions levied by the U.S. and the European Union, according to three officials and a bank executive with knowledge of the matter. As a result, VTB Group, Sberbank PJSC and other penalized lenders have been kept away from the central bank‘s 12-month foreign-currency facility, an emergency measure designed to help with external debt payments, the people said, asking not to be identified because the measure, introduced in December, was never made public.

The move highlights the depth and breadth of the economic disruption wrought by the sanctions levied over the conflict in Ukraine. The measures combined with plunging crude prices tipped Russia into its first recession since 2009 as consumer demand collapsed and the ruble lost almost half its value. The steps, while stripping the central bank of its role as lender of last resort and raising financing costs for the nation‘s largest lenders, reflect efforts to shield state funds amid the tensest standoff against the U.S. and Europe since the Cold War.