A run on several Russian banks is underway in the wake of harsh sanctions levied by foreign countries in response to Russia's invasion of Ukraine.
The Associated Press reports that people across Russia are lining up at banks and ATMs hoping to withdraw funds as fears over the economy grow. CNBC says that Sberbank Europe, which is owned by Russia's state-run Sberbank, has experienced "significant outflows of deposits in a very short time."
The economic worries come days after the U.S. and its allies took steps to cut Russia off from SWIFT, the global financial messaging system. EU Commission President Ursula von der Leyen said the 27-nation bloc took action to "paralyze the assets of Russia's central bank" so that its transactions would be frozen.
The move has been catastrophic for the ruble, the national currency of Russia. According to CNBC, the ruble dropped as much as 30% against the dollar this week, marking an all-time low.
In an attempt to stabilize the ruble and prevent hyperinflation, Russia's central bank doubled key interest rates to an eye-popping 20% on Tuesday. The Guardian also reports that Russia has ordered businesses to sell 80% of their dollar assets held abroad in the hopes of raising the value of the ruble in comparison.
Former Treasury Department officials and sanctions experts expect Russia to try to maneuver around the financial penalties by relying on energy sales and turning to the country’s reserves in gold and Chinese currency.
Russian President Vladimir Putin also is expected to move funds through smaller banks and the accounts of elite families, deal in cryptocurrency and rely on Russia's relationship with China.
The U.S. and its allies have taken steps to specifically target the finances of Putin and other Russian oligarchs in their recent sanctions. But it's not just Russia's leaders that are paying the price for the invasion of Ukraine.
"The way sanctions are hitting now, it's the middle class and the upper-middle class, those who travel who are feeling it," Margarita Balmaceda, a professor of diplomacy and international relations at Seton Hall University, told NBC News. "But it's when those key players, those oligarchs, are going to feel the burn that's important."