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:
- 1Tesco accounting snafu now subject of criminal probe
- 2Russian oligarch Yevtushenkov ordered to hand over oil company shares to the state
- 3How to get financing for a start up with no credit history
- 4Germany jobless fall, inflation remains weak
- 5Samsung profits slide, will focus on mid-to-low end smartphone market
- 1euronews live TV - News | euronews : the latest international news as video on demand
- 2International tv news | euronews: European and International tv news bulletin
- 3Two container ships collide on Egypt’s Suez Canal | euronews, no comment
- 4Revealed: Europe’s capital cities where it’s hardest to be a foreigner | euronews, world news
- 5European Union News | euronews: latest breaking news and headlines about European Union
- 6Turkish president Erdogan unveils his new palace of a thousand rooms | euronews, world news
- 7All you need to know about the Ebola virus | euronews, world news
- 8How nasheeds became the soundtrack of jihad | euronews, world news
- 9Where is the best place in Europe for women? | euronews, world news
- 10Sweden becomes first European nation to recognise Palestine | euronews, world news
- 11What to expect in “The World of Ice and Fire,” George R.R. Martin’s new book | euronews, world news
- 12Ebola: Six new suspected cases in Spain | euronews, world news
- 13Learning through “serious games” | euronews, learning world
- 14International breaking news | euronews online world breaking news in video
- 15US says ISIL makes $1 million-a-day selling oil – even to enemies | euronews, world news
- 16International news | euronews, latest international news
- 17Sweden becomes first EU country to recognise the Palestinian State | euronews, world news
- 18Philippe Starck: ‘Words like longevity and legacy have become almost avant-garde’ | euronews, the global conversation
- 19US delivers technical aid to Ukraine but warns over security | euronews, world news
- 20euronews apps : iPhone, iPad, Android, Windows Phone 8, Windows 8, Nokia S40, Nokia Asha, Smart TV and Google Glass
Wires > Business
- 16:23 CET Bank of England increases lenders’ risk buffers, but less than…
- 16:13 CET Banks lead FTSE higher after Japanese stimulus boost
- 16:12 CET Banks lead UK’s FTSE higher after Japanese stimulus boost
- 16:01 CET Without a plan, junk status looms for Tesco – Moody’s
- 15:37 CET Without a plan, junk status looms for Britain’s Tesco – Moody’s
- 15:31 CET Exclusive: Morgan Stanley commodities staff spooked by CEO comment
- 15:21 CET Bank of England sets out new leverage rules for banks
- 15:11 CET Bank of England sets out new leverage rules for banks