Russia woke up to a financial shock on Monday as the rouble fell to an historic low against the dollar.
Within the first minutes of trading Moscow’s stock markets lost around 9% of their value.
It comes after Russian troops took de facto control of Ukraine’s Crimea region over the weekend. Foreign investors were quick to pull their money out of the country fearing a war and talk of international sanctions.
Economists are predicting that this could tip the Russian economy into recession.
In response Russia’s Central Bank announced an increase of interest rates by 1.5%. Deputy Economy Minister Andrei Klepach told Reuters news agency that the ‘hysteria’ would pass, but admitted that relations with the European Union and the US would be ‘complicated’.
The reverberations were also being felt in Frankfurt and elsewhere, as European shares were down by 1.7% in early trading.