The ruble unscrewes, a European subsidiary of a Russian bank broke away. The Central Bank of the Country has doubled its interest rate, at 20%.
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Western economic sanctions seem to have reached their goal: Monday, February 28, Russia knew a serious financial crisis. The ruble, which was already down 60% since 2014, unscrewed: in the morning he had lost more than 20% facing the dollar. Forced to react, the Russian central bank has doubled its interest rate, from 9.5% to 20%, wearing a violent blow to the Russian economy.
Through the country, the inhabitants queues in front of the ticket distributors, looking for currencies. Ganding inflation and a sudden impoverishment of Russia seem inevitable. The beginning of a banking panic is profiled: the European subsidiary of Sberbank, the first Russian bank, property of the state, is bankrupt, after the massive withdrawal of deposits by its customers.
Westerners announced, on Saturday, February 26, unprecedented economic sanctions against Russia, in retaliation against the invasion of Ukraine. The United States, the European Commission, France, Germany, Italy, the United Kingdom and Canada have, in particular, decided to freeze the reserves of the Russian central bank, affecting its “Treasury of War “, according to the expression of Ursula von der Leyen, the president of the European Commission. The Russian Central Bank has $ 630 billion (562.3 billion euros), according to its own figures, published in January. What “cover twenty-one month of imports” from Russia, she said in January.
Among this sum, a portion ($ 167 billion) is in rubles, and is worth much less. A game is in gold ($ 132 billion), in coffers in Russia, and it is not affected by sanctions. But a portion ($ 95 billion) is filed with the major Western central banks, including the US Federal Reserve (Fed), or the Banque de France, which has about € 3 billion, in deposits. This money is now frozen.
In concrete terms, the Russian monetary institution no longer has the same firepower to defend the ruble on the financial markets. In the event of a monetary crisis, it can normally buy rubles to stop the devaluation. It is now limited in its action.
- How do the Russian authorities react?
The Central Bank of Russia had announced from Thursday, February 24, while the first Western penalties had been taken, that it intervened in the markets to ensure the financial stability of the country.
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