Political turmoil has sent shock waves across the Russian economy. Moscow stock markets opened on Monday with the country’s benchmark index recording its biggest decline in five years.
The rouble fell to an all-time low while the central bank unexpectedly raised its key lending rate to 7 percent from 5.5 percent.
“Of course investors could not help notice the foreign policy events, global events which happened over the weekend when markets closed. It had an impact on the rouble. The currency is going down at the Moscow exchange both against the dollar and against the euro. But the timely reaction from the central bank that raised a key interest rate made an immediate impact,” explained Moscow Exchange spokesman Nikita Bekaso.
Analysts predict Monday’s sharp decline could plummet further, with one saying there was a sell-off of everything and investors were acting with a “special fervour”.
It’s reported the Russian Central Bank has sold up to $10 billion reserves to support the rouble as it hit a record low.
Many exchanges were not prepared for the higher demand on the dollar with some private ones reporting they had run out of the currency.
It came at a time when the central bank has been striving to rein in inflation and ease currency swings.
“I don’t really have any positive feelings – nothing good really. I think the reasons for what has happened are quite clear. The political situation, a shaky economic situation and low GDP growth,” said one shopper in Moscow.
The international reaction to the political turmoil in Ukraine could weigh heavily on the Russian economy. The threat of sanctions may lead to demand for the country’s assets drying up and a sell-off in the currency deepening.
Copyright © 2014 euronewsMore about:
- 1euronews live TV - News | euronews : the latest international news as video on demand
- 2Now is ‘right time’ for Catalonia independence vote, says Mas | euronews, world news
- 3Vatican rocked by another paedophilia scandal | euronews, world news
- 4Two container ships collide on Egypt’s Suez Canal | euronews, no comment
- 5British Muslims’ message to ISIL: Not in my name! | euronews, world news
- 6Revealed: Europe’s capital cities where it’s hardest to be a foreigner | euronews, world news
- 7Sweden becomes first European nation to recognise Palestine | euronews, world news
- 8International tv news | euronews: European and International tv news bulletin
- 9European Union News | euronews: latest breaking news and headlines about European Union
- 10How nasheeds became the soundtrack of jihad | euronews, world news
- 11Iceland volcano ‘pollutes Paris’ | euronews, world news
- 12Ebola: Six new suspected cases in Spain | euronews, world news
- 13Emma Watson threatened with naked photos leak after UN equality speech | euronews, world news
- 14Learning through “serious games” | euronews, learning world
- 15Mike Tyson: ‘You learn humbleness when you get older in life’ | euronews, the global conversation
- 16US delivers technical aid to Ukraine but warns over security | euronews, world news
- 17euronews apps : iPhone, iPad, Android, Windows Phone 8, Windows 8, Nokia S40, Nokia Asha, Smart TV and Google Glass
- 18Global warming to ‘cause 250,000 extra deaths a year’ | euronews, world news
- 19All you need to know about the Ebola virus | euronews, world news
- 20International news | euronews, latest international news
Wires > Business
- 16:41 CET Bank of England paper says some clearing houses may need more…
- 16:30 CET UK bank stress test capital measure changed late in process -…
- 16:27 CET China to open up more sectors to private investment to spur growth
- 16:18 CET Deutsche Bank braces for 1 billion euros in U.S., UK Libor fines -…
- 16:03 CET Angry Cameron says won’t pay ‘unjustified’ EU bill
- 15:54 CET Angry Cameron says won’t pay ‘unjustified’ EU bill
- 15:47 CET Angry British PM Cameron says won’t pay ‘unjustified’ EU bill
- 15:35 CET Angry Cameron says won’t pay ‘unjustified’ EU bill