{"id":1349653,"date":"2022-02-28T15:09:33","date_gmt":"2022-02-28T20:09:33","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1349653"},"modified":"2022-02-28T15:09:49","modified_gmt":"2022-02-28T20:09:49","slug":"ruble-hits-record-low-as-russia-sanctions-take-hold","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/ruble-hits-record-low-as-russia-sanctions-take-hold\/","title":{"rendered":"Ruble Hits Record Low as Russia Sanctions Take Hold"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">18<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fruble-hits-record-low-as-russia-sanctions-take-hold%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1349653&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p class=\"subheading\"><span>The Russian ruble crashed amid a public frenzy to pull cash out of bank accounts on Monday, instantly knocking almost 30 percent off the value of a currency that was not in good shape to begin with.<\/span><\/p>\n<p><a href=\"https:\/\/www.cnbc.com\/2022\/02\/28\/russian-ruble-dives-nearly-30percent-against-the-dollar-amid-sanctions-ukraine-crisis.html\"><span>CNBC<\/span><\/a><span> spotted rubles trading at 119 to the dollar in offshore markets early Monday morning, down from 84 to the dollar on Sunday \u2013 the biggest single-day drop on record for the Russian currency.<\/span><\/p>\n<figure id=\"D-ROS-B1\" class=\"a8d\"><\/figure>\n<figure id=\"M-ROS-B1\" class=\"a8d\"><\/figure>\n<figure id=\"gmxrevmore\" class=\"H\"><\/figure>\n<p><span>Russia\u2019s central bank responded by freezing the Russian stock and derivative markets, forbidding brokers to fulfill sell orders from foreigners, ordering Russian companies to sell of 80 percent of their foreign currency reserves, and freezing about $8.78 billion in rubles held by local bank reserves.<\/span><\/p>\n<p><span>The Bank of Russia also raised benchmark interest rates from 9.5 percent to 20 percent in a bid to attract more deposits, while Russian bond yields jumped from ten percent to 24 percent based on the increasing risk that Russia will default on its foreign debts. Not many Russians appear to be taking the bait on deposits, as depositors eager to withdraw their money in cash created huge lines at ATMs across the country.<\/span><\/p>\n<div id=\"attachment_20047922\" class=\"wp-caption alignnone\"><a href=\"https:\/\/media.breitbart.com\/media\/2022\/02\/GettyImages-1238831988.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"size-large wp-image-20047922\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/02\/GettyImages-1238831988-1024x734-1.jpg\" alt=\"\" width=\"990\" height=\"710\" \/><\/a><\/p>\n<p class=\"wp-caption-text\"><em>Citizens wait in front of the entrance of a branch of the Russian Sbertbank in the center of Zagreb on February 28, 2022. Citizens rushed to the bank\u00a0 following last week\u2019s Russian attack on Ukraine. The ruble collapsed against the dollar and the euro on the Moscow Stock Exchange on February 28, 2022, as the West punished Moscow with harsh new sanctions over the Kremlin\u2019s invasion of Ukraine. (DENIS LOVROVIC\/AFP via Getty)<\/em><\/p>\n<\/div>\n<p><span>\u201cExternal conditions for the Russian economy have drastically changed. The increase of the key rate will ensure a rise in deposit rates to levels needed to compensate for the increased depreciation and inflation risks.This is needed to support financial and price stability and protect citizens\u2019 savings from depreciation,\u201d the Russian central bank <\/span><a href=\"https:\/\/news.sky.com\/story\/war-in-ukraine-russian-bank-run-has-already-started-as-rouble-plunges-to-all-time-low-12553800\"><span>said<\/span><\/a><span> in a statement on Monday.<\/span><\/p>\n<figure id=\"M-ROS-B2\" class=\"a8d\"><\/figure>\n<p><span>The European Central Bank (ECB) <\/span><a href=\"https:\/\/www.marketwatch.com\/story\/ecb-says-russia-bank-subsidiary-likely-to-fail-01646011276\"><span>said<\/span><\/a><span> on Monday that an Austria-based subsidy of Russia\u2019s state-owned Sberbank with 185 branch offices is likely to fail, because so many of its depositors fled after the invasion of Ukraine, leaving Sberbank Europe AG \u201cunable to pay its debts or other liabilities as they fall due.\u201d<\/span><\/p>\n<p><span>European Commission President Ursula von der Leyen <\/span><a href=\"https:\/\/ec.europa.eu\/commission\/presscorner\/detail\/en\/statement_22_1441\"><span>said<\/span><\/a><span> on Sunday that Europe\u2019s objective is to \u201cban the transactions of Russia\u2019s central bank and freeze all its assets, to prevent it from financing Putin\u2019s war.\u201d\u00a0<\/span><\/p>\n<p><span>Von der Leyen also said the EU will \u201ctarget the assets of Russian oligarchs\u201d and \u201csanction those Belarusians helping the Russian war effort.\u201d<\/span><\/p>\n<p><span>\u201cImportant Russian banks will be excluded from the SWIFT system,\u201d she said, dropping what financial analysts regard as the atomic bomb of financial sanctions.\u00a0<\/span><\/p>\n<p><span>SWIFT (Society for Worldwide Interbank Financial Telecommunication) is the Belgium-based service that allows thousands of banks around the world to conduct cross-border financial transactions smoothly and rapidly.<\/span><\/p>\n<figure id=\"M-ROS-B3\" class=\"a8d adSo\"><\/figure>\n<blockquote class=\"twitter-tweet\" data-width=\"550\" data-dnt=\"true\">\n<p lang=\"en\" dir=\"ltr\">Europe and Canada said they would close their airspace to Russian airlines, raising the pressure on the U.S. to do the same. <a href=\"https:\/\/t.co\/QfgDfzCF1S\">https:\/\/t.co\/QfgDfzCF1S<\/a><\/p>\n<p>\u2014 Breitbart News (@BreitbartNews) <a href=\"https:\/\/twitter.com\/BreitbartNews\/status\/1498322998834745352?ref_src=twsrc%5Etfw\">February 28, 2022<\/a><\/p>\n<\/blockquote>\n<p><span>The <\/span><a href=\"https:\/\/www.bbc.com\/news\/business-60521822\"><span>BBC<\/span><\/a><span> noted on Sunday that SWIFT \u201cis not supposed to take sides in disputes,\u201d but sanctions severed Iran\u2019s access to the system in 2012, wiping out some 30 percent of its foreign trade. When Russia was previously threatened with similar punitive action in 2014 for annexing Crimea, it said it would view SWIFT sanctions as an act of war.<\/span><\/p>\n<p><span>\u201cThe aim is for Russian companies to lose access to the normal smooth and instant transactions provided by Swift. Payments for its valuable energy and agricultural products will be severely disrupted. Banks would be likely to have to deal directly with one another, adding delays and extra costs, and ultimately cutting off revenues for the Russian government,\u201d the BBC explained.<\/span><\/p>\n<p><span>This could have significant repercussions for European nations that buy much of their oil and natural gas from Russia, and some analysts <\/span><a href=\"https:\/\/www.washingtonpost.com\/business\/china-can-bypass-swift-by-putting-digital-money-in-play\/2022\/02\/27\/56c60a14-9825-11ec-9987-9dceee62a3f6_story.html\"><span>fear<\/span><\/a><span> China could step in to save Russia by establishing an alternative to SWIFT that could grow large enough to seriously weaken the original transaction system \u2013 fulfilling an important goal of China\u2019s aggressive program for global economic domination.<\/span><\/p>\n<p><span>JP Morgan <\/span><a href=\"https:\/\/news.sky.com\/story\/war-in-ukraine-russian-bank-run-has-already-started-as-rouble-plunges-to-all-time-low-12553800\"><span>analyst<\/span><\/a><span> Jahangir Aziz said on Monday that if all new sanctions proposed by European governments and the United States are imposed, the impact on Russia\u2019s economy would be \u201csevere\u201d \u2013 possibly causing the Russian economy to contract by 20 percent in the second quarter.<\/span><\/p>\n<blockquote class=\"twitter-tweet\" data-width=\"550\" data-dnt=\"true\">\n<p lang=\"en\" dir=\"ltr\">When will they do the same with the Communist Chinese government? <a href=\"https:\/\/t.co\/4pA1QLk7n8\">https:\/\/t.co\/4pA1QLk7n8<\/a><\/p>\n<p>\u2014 Breitbart News (@BreitbartNews) <a href=\"https:\/\/twitter.com\/BreitbartNews\/status\/1497943758066921473?ref_src=twsrc%5Etfw\">February 27, 2022<\/a><\/p>\n<\/blockquote>\n<p><span>\u201cThe two pillars of the economy even in the midst of slowing growth, rising inflation, and high interest rates were the \u2018fortress\u2019 FX reserves of CBR and Russia\u2019s current account surplus. Not anymore,\u201d Aziz said, alluding to the sanctions strategy of freezing the huge foreign currency stockpile Russia accumulated by selling oil and gas.<\/span><\/p>\n<p><span>The <\/span><a href=\"https:\/\/www.wsj.com\/articles\/russias-ruble-financial-markets-are-hammered-by-sanctions-11646038133\"><i><span>Wall Street Journal<\/span><\/i><\/a> <span>(WSJ) quoted some analysts who feared the sanctions are going too far, too fast, potentially triggering a complete economic collapse that would devastate average Russian citizens and could inspire a cornered Vladimir Putin to further acts of belligerence. The sanctions could allegedly also backfire against European banks:<\/span><\/p>\n<blockquote>\n<p><span>\u201cI worry about the implications of destroying the Russian economy for global monetary and macro stability,\u201d said Julia Friedlander, director of the Economic Statecraft Initiative at the Atlantic Council.<\/span><\/p>\n<p><span>European companies and banks in particular have exposure to Russia. Some are already reconsidering their operations there, looking to sell or write down the value of their holdings. BP PLC said Sunday it would sell its stake of almost 20% in a Russian oil company. Norway\u2019s sovereign-wealth fund said it would look to exit around $3 billion in Russian stocks, which represent a sliver of the fund\u2019s $1.3 trillion in assets.<\/span><\/p>\n<\/blockquote>\n<p><span>Putin <\/span><a href=\"https:\/\/www.nytimes.com\/2022\/02\/27\/world\/europe\/ruble-russia-stock-market.html\"><span>responded<\/span><\/a><span> to the sanctions by issuing a highly publicized order to put Russia\u2019s nuclear forces on \u201cspecial alert,\u201d while Russian state media <\/span><a href=\"https:\/\/twitter.com\/maxseddon\/status\/1498023555975450626\"><span>breathlessly informed<\/span><\/a><span> citizens about all the nuclear weapons Russia could launch against Europe and the U.S. at a moment\u2019s notice. On a less dramatic note, Putin scheduled a meeting on Monday with top Russian bankers to discuss the looming financial crisis.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Russian ruble crashed amid a public frenzy to pull cash out of bank accounts on Monday, instantly knocking almost 30 percent off the value of a currency that was<\/p>\n","protected":false},"author":1,"featured_media":2315279,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-1349653","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1349653","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1349653"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1349653\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2315279"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1349653"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1349653"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1349653"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}