Citigroup reported Monday (Feb. 28) that its total exposure to Russian assets was at $5.4 billion at the end of December 2021, down from $5.5 billion three months earlier.
As Reuters reported, that exposure accounted for 0.3% of the banking giant’s assets last year. Citigroup also cautioned that it could see blowback from rising tensions between the West and Russia in the wake of Russia’s invasion of Ukraine.
The bank is monitoring the “situation and economic conditions and will mitigate its exposures and risks as appropriate,” Citigroup said in a regulatory filing.
Citigroup’s total third party exposure in Russia was almost $8.2 billion at the end of 2021.
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Last week saw the United States, the United Kingdom, dozens of European countries, Oceania and Japan impose sweeping sanctions against Russia in response to the invasion.
As a result, Russia’s ruble has crashed, dropping to the point that it’s worth less than a penny. The U.S. has also barred Russia’s central bank from dollar transactions.
Much of Russia’s foreign exchange and trade activity is denominated in dollars, which means the country cannot access the dollars it has traditionally kept in reserve, nor can it use dollars to counteract the impact of sanctions, or as a way to help prop up the ruble.
Russia’s central bank responded by raising interest rates from 9.5% to more than 20% in effort to prevent the ruble’s slide. The country closed it stock market, and the threat of bank runs remains present. (There were reports of Russians emptying ATMs this weekend.)
Even more onerous sanctions await. Western countries have said they will block a limited number of Russian banks from the SWIFT international trade messaging system, essentially cutting them off from the global economy.
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