Itskhoki, Oleg; Mukhin, Dmitry - National Bureau of Economic Research - 2022
We show that the exchange rate may appreciate or depreciate depending on the specific mix of sanctions imposed, even if … the underlying equilibrium allocation is the same. Sanctions that limit a country's imports tend to appreciate the country …'s exchange rate, while sanctions that limit exports and/or freeze net foreign assets tend to depreciate it. Increased …