New sanctions imposed on Moscow aim to prevent Russia from using its foreign exchange reserves to mitigate the economic impact of international measures.
Additional economic measures introduced by the Foreign Secretary prohibit UK individuals and entities from providing financial services to the Central Bank of the Russian Federation, as well as the Ministry of Finance and the National Wealth Fund.
Liz Truss said the move was aimed at “degrading the Russian economy” as the West seeks to pile financial misery on the country following its invasion of Ukraine.
The Foreign Office said the UK had worked closely with the United States and the European Union on sanctions introduced on Tuesday which aim to prevent Russia’s central bank from using its foreign exchange reserves “in a way to enable it to reduce the financial impact”.
It comes just a day after Russia’s central bank was forced to raise its key rate sharply in a desperate bid to prop up the ruble’s slide and stave off a bank run after being hit by a series of crippling Western sanctions.
The bank raised the key rate from 9.5% to 20%.
As part of Tuesday’s sanctions, Sberbank, Russia’s largest bank – which accounts for 35% of the financial sector, was banned from clearing sterling payments through the UK financial system.
The UK has already sanctioned Russia’s second largest bank, VTB, along with eight other financial institutions.
The Russian Direct Investment Fund (RDIF) – the country’s sovereign wealth fund – and its chief executive, Kirill Dmitriev, were also sanctioned, with their assets frozen and a travel ban in place for Mr Dmitriev.
The RDIF funds projects of strategic importance to Russia, the Foreign Ministry said.
Officials said the sanction would prevent UK individuals or businesses from dealing with RDIF.
The Foreign Minister said: “We said that Putin and those around him would pay the price for their unprovoked and illegal invasion of Ukraine, and we are keeping our word.”
Ms Truss said the new punitive sanctions “will hurt Russia’s economy and help putin to lose”.
She added: “We stand with Ukraine, its people and its democracy, and we will continue to support them diplomatically, economically, politically and defensively.”
The UK had already blocked customers of all Russian banks from accessing all domestic services.
The move was aimed at preventing three million Russian companies from accessing any foreign investment from the UK.