It happens after the Central Bank of Russia has decided to apply the highest interest rate hike in its historyby placing them at 20% – from 9.5% where they were last Friday.
During the last weekend, extensive lines of Russian citizens were observed to withdraw money from ATMs, motivated mainly by the implication that the closure of international flows with certain nations may have.
The economic sanctions of the Western powers on Russia are basically aimed at weakening the ruble and generating inflation.
“The great devaluation of the ruble and bank run is coming tomorrow when the markets open. We will see how the Central Bank of Russia handles it, which has reserves to spare. How much useless damage to the economy and its inhabitants due to the imperialist ambitions of a politician,” he had anticipated Gustavo Neffa, director of Research for traders.
To counteract the effect of international measures and in the midst of the collapse of the ruble, The Moscow Stock Exchange announced that it will not open this Monday and neither will it open tomorrow, according to the provisions of the Central Bank of that country.
In addition, the monetary authority temporarily prohibited any sale of securities belonging to non-residents of the country with “the sole objective of protecting the legitimate rights and interests of investors in the markets,” it was officially reported.
Moscow’s intention is to prevent foreign investors from leaving the Russian financial market.
The oil company BP has already announced that it would abandon its participation in the state energy company Rosneft.
And added to that attitude is the intention of sovereign wealth funds in Norway and Australia to sell their Russian assets.
The price of the ruble in the foreign exchange markets at its parity against the dollar and the euro today collapsed 27%, after various economic sanctions were announced over the weekend by Western powers.
Specifically, from the first hour of the morning, The Russian currency began a downward spiral against the dollar that led the US currency to be exchanged for up to 117,817 rubles, its highest value since there are records.
During the last few days, the exchange rate had reached a maximum of just over 86 rubles per dollar.
The evolution of the cross against the euro experienced a similar evolution.
After the first hours of trading, the euro was exchanged for 132.8843 rubles, compared to the environment of 90-93 rubles in which it had been exchanged in the last week.
The Russian central bank affirmed yesterday that it is able to maintain the country’s financial stability despite the freezing of its international assets announced the day before by the United States, the European Union, Canada and the United Kingdom, in one of the harshest sanctions received by Russia since it began its invasion of Ukraine.
These sanctions – which also include the exclusion of some Russian banks from the Swift financial mechanism – paralyze a good part of the 600,000 million euros in gold and foreign currency of the monetary authority.
However, after these sanctions, the Bank of Russia announced a battery of economic measures: raising interest rates to 20%, closing stock market operations and capital controls for foreign investors.
Source: Ambito
David William is a talented author who has made a name for himself in the world of writing. He is a professional author who writes on a wide range of topics, from general interest to opinion news. David is currently working as a writer at 24 hours worlds where he brings his unique perspective and in-depth research to his articles, making them both informative and engaging.
