The rouble has collapsed. Interest rates have risen from 9.5% to 20%. Capital controls may follow. It shows how isolated Russia has become.
As financial markets began trading on Monday in Asia, the value of the Russian currency slumped. The US dollar rose by as much as 40% against it.
The cause: harsh Western sanctions introduced over the weekend. In effect these freeze Russia’s foreign currency reserves and begin to lock its banks out of the SWIFT network for arranging international transactions.
If the rouble’s weakness endures and efforts to prevent capital from leaving the country continue, the financial damage to Russian businesses and livelihoods could be lasting. Read why:
https://econ.trib.al/cXTc8rA
Credit: AP Photo/Victor Berzkin
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