Russia sharply increases rates as sanctions send rouble plunging
Russia’s central bank more than doubled interest rates on Monday in an attempt to steady the country’s financial markets, after unprecedented western sanctions sent the rouble tumbling as much as 29 per cent.
The central bank boosted its main interest rate to 20 per cent from 9.5 per cent in an emergency decision, saying that “external conditions for the Russian economy have drastically changed”.
The rouble dropped to almost 118 against the US dollar in offshore trading on Monday, according to Bloomberg data, following a weekend when Russian president Vladimir Putin put his nuclear forces on high alert and the US and Europe unleashed their toughest sanctions in a bid to cut the country off from the global financial system.
Russia’s biggest foreign bond, a $7bn bond maturing in 2047, halved in price to 35 cents on the dollar, according to Tradeweb data. Investors said the market was extremely hard to trade. “If you…
