Russia hikes interest rates to 20% as rouble dives in value

Western sanctions on reserves prevent further support of rouble

Russia’s central bank more than doubled interest rates on Monday in an attempt to steady the country’s financial markets, after unprecedented western sanctions sent the rouble tumbling as much as 29 per cent. The central bank boosted its main interest rate to 20 per cent from 9.5 per cent in an emergency decision, saying “external conditions for the Russian economy have drastically changed”.

The rouble dropped to almost 118 against the dollar in offshore trading on Monday, according to Bloomberg data, after Russian president Vladimir Putin put his nuclear forces on high alert and the United StatesEurope and UK unleashed sanctions aimed at cutting the country off from the global financial system. Trading in shares and derivatives on the Moscow Exchange was suspended, Russia’s central bank confirmed on Monday. However, Russia-focused shares traded on other markets around the world dropped heavily.
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