The Bank of Russia takes immediate action to shield the nation’s 1.5 trillion economy from a series of stiff sanctions that have hurt the financial sector. RUB USD down -12.81%
- The bank more than doubled its core interest rate to 20%, the highest level in nearly two decades, and restricted the flow of capital.
- Policymakers also banned brokers from selling securities held by foreigners starting Monday on the country’s main exchange amid risks of a bank run.
- Exporters were required to start compulsory hard-currency revenue sales and trading in stocks was halted temporarily in Moscow.
- The Russian currency will not be allowed to breach a certain range unless the Bank of Russia changes the trading corridor.
- Governor Elvira Nabiullina stated that this is an act of desperation to control the ruble from plunging further, noting Russia cannot access its reserves and will depend on income from gas deliveries.
- Less than 7 days after Putin gave an order to invade Ukraine, Russia faces the risk of succumbing to the largest financial crisis in more than decades of his reign.