Russia’s stock market closes and ruble collapses on sanctions

MOSCOW – The ruble fell, the stock market froze and the public rushed to cash in on Monday as Western sanctions kicked in and Russia awoke to uncertainty and fear of the consequences. rapid spread of President Vladimir Putin’s invasion of Ukraine.

As the day began, the Russian currency lost up to a quarter of its value within hours. Trying to stem the fall, the Central Bank of Russia doubled its prime interest rate, banned foreigners from selling Russian securities and required exporters to convert most of their foreign currency receipts into rubles. It closed the Moscow stock market for the day because of the “evolving situation.”

Kremlin spokesman Dmitri S. Peskov told reporters: “Economic realities have of course changed, and announced that Putin has convened an emergency meeting with top financial officials. mine.

Even as the Russian and Ukrainian delegations meet for talks on the Belarusian border, Moscow’s military offensive shows no sign of giving up and the fiery moves show the first signs of sanctions. The sanctions imposed on Russia by the West over the weekend have shaken Russia’s foundations. so economic. Decisions by the United States, Great Britain and the European Union to restrict the Central Bank of Russia’s access to much of its $643 billion in foreign currency reserves have largely undermined the Kremlin’s cautious efforts to reduce lessen the impact of potential sanctions.

And with dozens of countries closing their airspace to Russian planes, major foreign investors retreating and the West placing debilitating restrictions on Russia’s biggest banks, apparently. It is clear that Putin’s invasion of Ukraine is ushering in a period of international isolation for Russia. since the Cold War.

“So, has Russia become Venezuela or is it still Iran?” The morning host of the liberal Echo of Moscow radio station asked an economist on Monday.

“We will pass the Iran phase,” replied Yevgeny S. Gontmakher of the Moscow Higher School of Economics, referring to sanctions imposed on Iran because of its uranium enrichment plan, “but this is not the case. What happens after that is hard to say.”

Elvira Nabiullina, the widely respected governor of the Central Bank of Russia, is scheduled to give a public address at 4 p.m. Moscow time.

On Sunday, Putin called Western sanctions “unlawful” during a televised meeting with his defense minister and top military commander. Mr. Putin then ordered them to put Russia’s nuclear arsenal on high alert; Some analysts fear that Russia’s economic instability could lead Putin to escalate conflicts with the West using new military threats or other means, such as cyberattacks. .

However, within Russia there is also extreme instability as the value of people’s savings evaporates and the connection with the Western world that Russians have taken for granted for the past three decades is rapidly fading. cut out. It remains unclear whether most Russians blame Mr. Putin for the crisis – or whether they take cues from Kremlin propaganda and blame the West.

“Times have changed, many things have happened, but one thing has not changed,” a reporter for state news channel Rossiya 24 said on Sunday. “When a united Europe tries to destroy Russia, this always yields the opposite result.”

Ivan Nechepurenko contributed reporting. Russia’s stock market closes and ruble collapses on sanctions

Fry Electronics Team

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