U.S. officials: Sanctions likely to spike Russian inflation, hit purchasing power

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FILE PHOTO: A Russian state flag flies over the Central Bank headquarters in Moscow

WASHINGTON – Fierce economic sanctions imposed by the United States and its allies on Russia’s central bank and other key sources of wealth are likely to drive Russian inflation higher, cripple its purchasing power drive down investments , U.S. officials said on Monday as new sanctions took effect.

Russia’s central bank has been trying to move hundreds of billions of dollars to safe havens since the latest sanctions were first announced on Saturday, the officials said, adding Monday’s actions will hinder its ability to access funds.

(Reporting by Daphne Psaledakis, Steve Holland and Andrea Shalal; writing by Susan Heavey)