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.
- 1Snowden, Assange and Manning statues unveiled in Berlin | euronews, world news
- 2Chomsky says US is world’s biggest terrorist | euronews, the global conversation
- 3euronews live TV - News | euronews : the latest international news as video on demand
- 4Nepal: ‘equally big earthquakes coming in eastern regions,’ expert tells euronews | euronews, world news
- 5It’s a girl: Britain’s Duchess of Cambridge gives birth in London | euronews, world news
- 6How Nepal earthquake devastated Kathmandu’s UNESCO heritage | euronews, world news
- 7Chernobyl Children: what makes Ukrainians born in 1986 different? | euronews, world news
- 8Juncker to Hungarian PM Orban: “Hello, Dictator!”
- 9International breaking news | euronews online world breaking news in video
- 10Exclusive: unrest in FYR Macedonia could hit other Balkan countries warns Serbian PM | euronews, world news
- 11Evidence of ancient wine found in Georgia a vintage quaffed some 6,000 years BC
- 12International tv news | euronews: European and International tv news bulletin
- 13Andrea Ferrari: the graphene guru | euronews, science
- 14Portuguese language reform law goes global | euronews, world news
- 15EU membership remains Serbia’s priority, says PM Aleksandar Vucic | euronews, the global conversation
- 16Watch: France’s Jean-Marie Le Pen clashes with UKIP MEP Woolfe | euronews, world news
- 17Spain: the viral soldiers fighting in Madrid and Barcelona mayoral races | euronews, world news
- 18eurovibes - a selection of Europe’s best music talent
- 19How young translators are helping knit European culture together | euronews, generation y
- 20We will not be moved! China’s urban spread resistance [PHOTOS]
Wires > Business
- 02:14 CET Fiat Chrysler CEO approached GM about a merger, was rebuffed – NYT
- 21:25 CET Daimler and Qualcomm to develop in-car tech, wireless charging
- 21:01 CET Renault in Turkey offers concessions to striking workers
- 20:40 CET Bank of England confirms EU exit research after email misfire
- 17:59 CET Greek PM says on final stretch towards deal with lenders
- 14:35 CET No Pacific trade deal meeting until U.S. fast-track passes – Chile
- 13:15 CET Germany’s Merck expects drug division to drive growth-Euro am…
- 10:56 CET Bank of England’s Haldane says UK rates to rise at some point