Russia fears bank run as Rouble crashes to a record low

After the West issued new sanctions against Russia, the rouble fell to a record low against the dollar. President Vladimir Putin placed his nuclear forces on high alert.

The Moscow Exchange will open forex trading and money market trading on Monday at 10 AM Moscow time – three hours earlier than usual.

Also, the bourse stated that it would suspend forex trading.

This is the latest indicator of how disruptive markets will be when they open in the morning. It comes as traders react to Western sanctions and an escalation in Putin’s rhetoric.

In early trading, the Russian currency fell almost 30pc and was at 119 dollars per dollar. In a desperate bid for economic recovery, the Russian central bank increased interest rates by 20%.

The move was made after the US and its allies in the West agreed to expel Russia from the Swift international payment platform. They also took measures against Russia’s central bank. Meanwhile, the EU has banned Russian airlines and sent weapons to Ukraine.

The global markets are bracing for a turbulent day of trading. Brent crude oil jumped to $102 per barrel, and gas prices soared nearly 40pc. Meanwhile, the US and European stock markets are poised for a plunge at the open.

In a desperate attempt to support its economy, the Bank of Russia raised its key interest rate from 20pc to 20pc.

The interest rate will rise from 9.5pc. In addition, the central bank introduced mandatory hard currency revenues sales to exporters. Brokers were also prohibited from selling securities to foreigners.

The regulator had earlier today announced a temporary sales stop on the Moscow Exchange without specifying the securities that the ban applies.

This is Moscow’s attempt to reduce the negative effects of sanctions and prevent bank runs.

Yesterday, Russians raced to cashpoints. There were reports that the machines ran out of banknotes. Vladislav Zhukovskiy, a Russian economist, stated that “panic” has begun.

He stated that there were queues at ATMs all over the country to withdraw cash. The dollar is being sold by banks at prices ranging from 100 to 120 rubles!

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