The ruble sold off heavily on March 17 after US President Joe Biden said that Russian President Vladimir Putin is a killer in an interview.

ABC News Chief Anchor George Stephanopoulos asked Biden if he thought Putin is “a killer.” Biden murmured agreement and said “I do,” without elaborating.

The interview follows the release of an intelligence report on Russia commissioned by Biden shortly after taking office that concluded Russia attempted to interfere in the recent elections, but did not use hackers or technology to try to skew the results. The interference was limited to trying to confuse the debate with misinformation and messaging on social media.

Biden went on to say that Putin will “pay a price” for his meddling. In a “long talk” with the Russian leader last month, Biden said he told him: “I know you and you know me. If I establish this occurred, then be prepared,” Bloomberg reported.

Russian Ambassador to Washington Anatoly Antonov has been recalled for consultations, Foreign Ministry Spokesperson Maria Zakharova said in a statement on March 17.

"Russian Ambassador to Washington Anatoly Antonov has been invited for consultations in order to figure out what to do and where to move in terms of relations with the United States," the statement reads as cited by Tass.

Zakharova stressed that Russia was interested in preventing relations with the US from irreversibly deteriorating and blamed Washington for the stalemate between the two countries. "The main thing for us is to find out ways to improve Russia-US relations," she added.

The intelligence community report concluded that Russia ran a media campaign favouring former President Donald Trump similar to a campaign favouring Trump in the 2016 elections.

The comments sparked speculation that new sanctions on Russia could be announced very soon. Previously it was reported that the White House would issue a statement on sanctions pertaining to Russia’s alleged use of the chemical weapon Novichok in June.

The Biden administration has already issued one set of very limited sanctions connected to the use of Novichok against jailed anti-corruption activist and opposition politician Alexei Navalny that saw nine officials directly involved in the prosecution and jailing of Navalny sanctioned under the terms of the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991 (CBW).

By enacting the CBW as the basis of the sanctions, that automatically triggers new deadlines and further actions beginning three months later according to US law. As part of his process the US also announced on March 17 that it was expanding restrictions on exports of chemical weapons to Russia, which is mandatory once the CBW has been enacted. But this ban is purely symbolic, as the US has exported almost no weapons to Russia since the end of the Lend-Lease arrangements in 1945.

However, the US could introduce more sanctions against Russia earlier than June and separately from the CBW mechanism for alleged meddling in its 2020 elections, CNN reported on March 17 citing unnamed sources that did not detail possible sanction targets. CNN reported that “people close to Putin” could be sanctioned, without giving any details.

Biden’s comment follows US Secretary of State Antony Blinken, who was appointed in February and gave his first major foreign policy speech this month, where he laid out a more balanced picture of the need to be tough on China and Russia, but which would be tempered by consultations with Europe, which wants a more accommodative relationship with Moscow.

The Russian ruble sank as much as 1.6% to 74 per dollar, its biggest intraday loss since February 25, Bloomberg reports. The benchmark MOEX index also extended declines, and was down 2.1% as of 2:37 p.m. in Moscow. Ten-year bond yields were up three basis points at 6.84%, close to their highest in a year.

Biden’s comments caught out many traders who had taken bets that the US sanctions would be insignificant.

“Lots of lazy ruble longs put back on this week, on sell side shops banging the line the US would do next to nothing on the sanctions front,” said Tim Ash, senior sovereign strategist at BlueBay Asset Management in a note to clients. “It’s still amazes me how sanguine the sell side is on Russia sanctions risks. Guess banks typically are all “invested”, one way or another, in the Russia story.”

These market participants argue that US investors are too deeply exposed to Russian sovereign debt and Russia is already too deeply integrated into the global economy for the US to be able to impose really painful sanctions. Moreover, Blinken’s stated goal of co-ordinating with the EU on its Russia policy is also taken to mean US sanctions will be targeted, but won’t include any economically damaging measures.

Biden said that in a past conversation with Putin, he told him that he had “looked in your eyes and I don’t think you have a soul.”

The rakes on Russian social media immediately launched into a bit of fun over the whole “killer” story. A famous cartoonist produced a picture of billionaire oligarch Arkady Rotenberg stepping in front og Putin, saying “No! I’m the killer!” a reference to Rotenberg’s recent “admission” that he was the real owner of Putin’s Palace, the subject of Navalny’s last expose of Putin’s hidden wealth released in January.