In the first day of trading since harsh new sanctions were imposed, the Russian rouble plunged nearly 30%, to a new record low against the US dollar. The euro sank more than 1%, while the price of oil surged.
The measures introduced this weekend increase the financial and social costs of Russia’s invasion of Ukraine.
Russians are already waiting in long queues, worried that their bank cards may stop working or that limits will be placed on the amount of cash they can withdraw.
And according to regulators, some of the European operations of Sberbank, the Russian state owned bank, are failing.
The new ban on the Central Bank of Russia’s ability to use its roughly $630bn (£471bn) in foreign reserves undermines its ability to defend the rouble. Inflation is likely to go up because of the currency’s weakness.
This leaves the central bank with a few options, including raising interest rates or limiting the amount of money that can be brought into or out of the country.