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Russia’s Central Bank Has Doubled Interest Rates And Closes Stock Market Trading As Value Of The Rouble Plunges

The Russian rouble has crashed more than 40% to a new record low against the dollar, oil prices have jumped as much as $7 a barrel and gold prices have gained 1%, as financial markets opened for trading for the first time since western nations announced wider economic sanctions on Russia for its invasion of Ukraine.

The sanctions include blocking some Russian banks from the Swift international payments system, leading to expectations among investors of a run on the Russian currency as people scramble to swap their roubles for dollars and other denominations.

The Russian central bank was quick to respond and hiked its key interest rate to 20% from 9.5% this morning to stem the slide in the rouble, which will lead to higher inflation.

Russia has also ordered companies to sell 80% of their foreign currency revenues, the central bank and the finance ministry said.

This comes after a number of measures announced by the Bank of Russia on Sunday to counter the economic impact of western sanctions.

It said it would resume buying gold on the domestic market, launch a repurchase auction with no limits and ease restrictions on banks' open foreign currency positions.

It also increased the range of securities that can be used as collateral to get loans and banned brokers from selling Russian securities to foreigners.

The rouble dropped as low as 119 per dollar in Asian trading, and later traded 28.8% lower at 118, compared with its closing price of 83.64 on Friday.

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