Russia’s central bank has more than doubled its benchmark interest rate to 20% to boost the country’s ruble currency that has fallen nearly 30% against the U.S. dollar in recent days.
The ruble has plunged as an increasing number of sanctions are imposed on Russia over its invasion and military attacks on Ukraine.
The latest move by the international community, which includes Canada, is to block Russian banks from being able to use the interbank messaging system, SWIFT, which connects more than 11,000 banks and financial institutions in over 200 countries and territories.
The Russian ruble has fallen 29% against the U.S. dollar, hitting an all-time low as markets assessed the impact of sanctions on Russia.
The ruble was trading as low as 119 per dollar as offshore trading started in the morning during Asia hours, from nearly 84 per dollar at the previous close, according to Factset data.
Russia’s stock and derivatives markets remain shutdown amid the ongoing attacks in Ukraine.
Russia’s central bank on Monday confirmed it had barred its brokers from carrying out sell orders from foreigners as it seeks to contain the financial market fallout. It also said it would be freeing 733 billion rubles ($8.78 billion U.S.) in local bank reserves to boost liquidity.
On Sunday, after days of air, sea and land assaults on Ukraine, Russian President Vladimir Putin put his country’s nuclear deterrence forces on high alert, news that has roiled stock markets globally.
To help stabilize the ruble, Russia’s central bank has more than doubled the country’s key interest rate from 9.5% to 20%. The rate hike, Russia’s central bank said, “is designed to offset increased risk of ruble depreciation and inflation.
