Coins of Russian rubles are seen in front of the US dollar bill shown in this illustration, made on February 24, 2022. REUTERS / Dado Ruvic / Illustration / Files
March 2 – Roll fell to a record low in Moscow of $ 110 a dollar on Wednesday, and the stock market remained closed as Russia’s financial system faltered under Western sanctions over Moscow’s invasion of Ukraine.
The roll was 7.3% weaker during the day at 108.60 against the dollar at 09:41 GMT in trade in Moscow, previously reaching 110.0, the lowest level of all time. Since the beginning of the year, it has lost about a third of its value against the dollar.
On Wednesday, it fell 7.1% to trade at 120.50 euros.
For the third day in a row, the ruble was weaker outside Russia, trading at $ 115 per dollar on the EBS e-commerce platform, but still above the lowest level of 120 reached on Monday.
Russia responded by doubling interest rates to 20% and telling companies to convert 80% of their foreign currency earnings into the domestic market as the central bank or the CBR, which is now under Western sanctions, stopped foreign exchange interventions.
JP Morgan said it was preparing for a deep recession in Russia and re-evaluating its regional macro-forecasts.
“The latest CBR measures have completely changed the picture,” said JP Morgan.
“Russia’s large current account surplus could absorb large capital outflows, but with accompanying CBR and SWIFT sanctions, in addition to existing restrictions, Russia’s export earnings are likely to be disrupted and capital outflows likely to be immediate. .
Several Russian banks have been banned by the global financial network SWIFT, which facilitates transfers between banks.
Moscow called its actions in Ukraine a “special operation” it said was not intended to occupy territory but to destroy the military capabilities of its southern neighbor and capture dangerous nationalists.
As households and businesses in Russia rushed to convert the falling ruble into foreign currency, banks raised interest rates on foreign currency deposits.
Russia’s largest lender Sberbank (SBER.MM) offers to pay 4% for deposits up to $ 1,000, while the largest private lender Alfa Bank offers 8% for quarterly dollar deposits. For deposits in rubles Sberbank offers 20% annual yield.
Sberbank said on Wednesday that it was leaving almost all European markets, blaming large cash flows and threats to its staff and assets after the ECB ordered the closure of its European division. Read more
A weak ruble will hit Russia’s standard of living and inflate already high inflation, while Western sanctions are expected to lead to a shortage of basic goods and services such as cars or flights. Read more
Reuters report; Edited by Andrew Havens and Edmund Blair
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