The ruble collapses to about -30% against the US dollar, following the imposition of tougher sanctions against Vladimir Putin’s Russia imposed by the West in response to the invasion of Ukraine. Yesterday the European Union, the United States, Great Britain and other Western nations agreed to cut some Russian banks out of the SWIFT international payment system and impose restrictions on the Russian central bank.
This will undermine the Kremlin’s ability to use its central bank reserves to mitigate the impact of other sanctions.
The ruble thus capitulated to 119 per US dollar at the start of offshore trading that began in the Asian morning, from 84 per US dollar the previous day, according to data from FactSet.
Russia’s central bank has confirmed that it has banned its brokers from executing sell orders from foreign parties in order to contain the impact on the country’s assets.
The institution also said it will release local reserves worth 733 billion rubles (the equivalent of 8.78 billion dollars), in order to increase liquidity in the markets.