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.

Biden announces ‘first’ sanctions on Russia over Ukraine

Sanctions against Russian banks

“This is the beginning of a Russian invasion of Ukraine,” Biden said in a televised speech at the White House. Biden stressed that the measures were only a “first tranche” in response to Russian President Vladimir Putin “carving out a big chunk of Ukraine.”

The latest package would issue sanctions on two major Russian banks and on the country’s sovereign debt, meaning it can no longer raise money from the West and trade new debt on U.S. or European markets, the president said. Starting tomorrow, the U.S. will also impose sanctions on Russian elites and their family members, he added.

Biden said that more sanctions will follow if Putin extends Russia’s military grip beyond two small territories in the eastern Donbas region that are already under control of Russian-backed separatists.

Putin announced Monday that he has recognized the independence of both areas and said the Russian military would mount a so-called “peacekeeping” mission in the territories.

Biden Warns U.S. Won’t Send Troops to Rescue Americans in Ukraine

“Rescues in a conflict zone during a Russian invasion would risk “world war”

President Biden on Thursday warned Americans to leave Ukraine, saying that U.S. troops would not be dispatched to retrieve them should Russia invade.

“American citizens should leave, should leave now,” Mr. Biden said in an interview with NBC’s Lester Holt that aired on Thursday evening, adding that there was no scenario that could prompt him to send troops to rescue Americans. “We’re dealing with one of the largest armies in the world. This is a very different situation, and things could go crazy quickly.”

“That’s a world war when Americans and Russia start shooting at one another,” Mr. Biden added. “We’re in a very different world than we’ve ever been in.” Mr. Biden’s comments followed a string of increasingly urgent warnings for U.S. citizens to leave Ukraine as thousands of Russian troops have amassed on its borders.