The Russian currency rouble has collapsed, dropping low drastically against the United States dollar after the western nations imposed tough sanctions on Russia following its full scale invasion in Ukraine.
The currency hit the record low of 110 to the dollar in Moscow on Wednesday and crawled back under 100 in other trading platforms, though it remained under pressure as the country’s financial system is currently unstable under the weight of Western sanctions imposed over Russia’s invasion of Ukraine.
The Russian stock market remained closed and trading on bonds showed wide bid-ask spreads and little volume.
The rouble fell 4.5% to 106.02 against the dollar in Moscow trade, earlier hitting 110.0, a record low.
It has lost about a third of its value against the dollar since the start of the year.
Against the euro, it shed 2.5%to finish the day at 115.40.
But trading outside of Russia saw the currency gain near 10% on the day toward 95 per dollar, still 20% weaker than where it traded at during the first half of February.
Russia responded to the currency weakness by doubling interest rates to 20% and telling companies to convert 80% of their foreign currency revenues on the domestic market as the central bank, or CBR, which is now under Western sanctions that stopped foreign exchange interventions.
The weak rouble will hit living standards in Russia and worsen the already high inflation, while Western sanctions are expected to create shortages of essential goods and services such as cars or flights.
Meanwhile, Russia proceeds with attacking Ukraine targeting large cities despite all efforts by other Western nations warning Russia to ceasefire, reports have it the air strike by Russia today killed at least 21 Ukrainians in Kharkiv city.