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US plans more sanctions as ruble sinks deeper

December 17, 2014

US President Barack Obama is planning to sign a bill allowing tighter sanctions against Moscow as the Russian ruble continues to slide on financial markets. But there is room for maneuver, the White House said.

Symbolbild - Rubel auch nach Riesen-Zinsschritt auf Talfahrt
Image: Getty Images/Afp/Kirill Kudryavtsev

White House officials said on Tuesday that Obama was set to sign the bill - which was passed by US Congress at the weekend - allowing for the imposition of new sanctions and guaranteeing the provision of lethal and non-lethal military aid to Kyiv.

"The president does intend to sign the bill," spokesman Josh Earnest told reporters, while adding that the president did have some leeway about the final implementation of the strategy.

Given the fact that negotiations over Ukraine, which Russia is a part of, are currently ongoing, Obama would be able to waive implementation of some of the sanctions.

'They have an off-ramp'

However, State Department spokeswoman Jen Psaki said it "remains the case that Russia has a choice to make. They have an off-ramp; and they've long had an off-ramp."

The sanctions, aimed at Russia's defense and energy sectors, have been branded by Russian Foreign Minister Sergey Lavrov as hostile, and come as Moscow faces deepening economic turmoil.

Against a background of plunging oil prices and existing sanctions imposed on Russia by the EU and US, the value of the ruble fell to an unprecedented low on Tuesday, trading at 80 rubles to the dollar.

With a plentiful supply of petroleum in many world markets at present, the price of a barrel of oil has been on the decline - meaning that hydrocarbon-rich Russia a net loser. A November meeting of the Organization of Petroleum Exporting Countries (OPEC) agreed that the production ceiling should not be reduced, causing oil prices to fall still further.

Washington and Brussels imposed their last round of sanctions over Moscow's actions in Ukraine in September. The Kremlin is under fire over its annexation of Crimea earlier this year, as well as the alleged supply of weapons and manpower to separatist rebels in the eastern Ukrainian provinces of Donetsk and Luhansk.

rc/bk (AP, AFP, dpa)