(Bloomberg) The Bank of Russia has increased its interest rate to 20% from 9.5% as it rushes to shield the economy from the impacts of sanctions imposed by the West.
The bank also banned brokers from selling foreign-held securities on the Moscow Exchange. It also brought compulsory hard-currency revenue sales targeting exporters.
The moves happened even as the rouble touched a low of about 111 against the US dollar, from Friday’s 83, following accelerated sanctions by the US and the EU.
Commerzbank AG strategist Ulrich Leuchtmann says Russia is yet to prevent fire-sales of its securities to arrest market panic. The strategist says the move by the central bank is harmful in the long-run but preferred by the authorities to avert the risk to the economy.
The recent measures happen after the EU and US agreed to block access to about $640 billion of the Russian central bank reserves. Additional sanctions include moves to cut off some Moscow banks from the SWIFT messaging system.
S&P Global Ratings has already lowered Russia’s credit score below investment grade, while Moody’s Investors Service is considering a downgrade.
USDRUB is up +19.76%.
