(28 Feb 2022) The ruble plunged to a record low of less than 1 U.S. cent and most global stock markets declined Monday after Western nations moved to block some Russian banks from a global payments system.
Russia's invasion of Ukraine has caused markets to swing wildly, given the potential impact on inflation, energy supplies and other economic repercussions.
"Russia is slowly running out of money," said Robert Halver, head of market research at Baader Bank, adding that this why Russia is trying to keep capital in the country.
President Vladimir Putin's order that Russian nuclear weapons stand at increased readiness to launch ratcheted up tensions with Europe and the United States and revived dormant fears from the Cold War era.
The Russian central bank raised its key rate to 20% from 9.5% in a desperate attempt to shore up the plummeting ruble and prevent a run on banks.
That brought a temporary reprieve for the Russian currency, which bounced back to the level it was at last week, but only briefly.
The ruble has plunged more than 30% after the move to block Russian banks from the SWIFT payments system.
The sanctions include restrictions meant to crimp the Russian central bank's access to over $600 billion in reserves and hinder its ability to support the ruble.
A weaker ruble is expected to cause inflation to surge, potentially angering Russians whose budgets will be stretched by soaring prices. It will also add to strains across Russia's financial systems.
Germany's DAX fell 2.1% to 14,263.95 and the CAC 40 in Paris lost 2.3% to 6,595.83. Britain's FTSE 100 shed 1.7% to 7,365.29.
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