Fresh sanctions slapped on Moscow are designed to prevent Russia from using foreign reserves to lessen the economic impact that international measures are causing.

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 National Wealth Fund.

Liz Truss said the decision was aimed at “degrading Russia’s economy” as the West looks to pile financial misery on the country following its invasion of Ukraine.

The Foreign Office said the UK had worked in close partnership with the United States and European Union on the sanctions introduced on Tuesday which aim to prevent the Russian central bank from using its foreign reserves “in ways that allow it to lessen the financial impact”.

It comes only a day after Russia’s central bank was forced to sharply hike its key rate in a desperate attempt to shore up the plummeting rouble and prevent the run of banks after being hit by a slew of crippling Western sanctions.

The bank hiked the benchmark rate to 20% from 9.5%.

As part of Tuesday’s sanctions, Sberbank, Russia’s largest bank – which accounts for 35% of the financial sector, has been prohibited from clearing sterling payments through the UK’s financial system.

The UK has already sanctioned Russia’s second largest bank, VTB, as well as eight other financial institutions.

The Russian Direct Investment Fund (RDIF) – the country’s sovereign wealth fund – and its chief executive, Kirill Dmitriev, have also been sanctioned, with their assets frozen and a travel ban in place for Mr Dmitriev.

RDIF funds projects of strategic significance to Russia, the Foreign Office said.

Officials said the sanction will stop UK individuals or companies dealing with RDIF.

The Foreign Secretary said: “We said Putin and those around him would pay the price for their unprovoked and illegal invasion of Ukraine, and we are being true to our word.”

Ms Truss said the new punitive sanctions “will degrade Russia’s economy and help make sure Putin loses”.

She added: “We stand with Ukraine, its people and its democracy, and will continue to support them diplomatically, economically, politically and defensively.”

The UK had already blocked customers of all Russian banks from accessing any domestic services.

That was move was aimed at preventing three million Russian companies from accessing any foreign investment from the UK.