Sanctions leave Russian rouble routed - 趙永祥的數位歷程檔

Following the devastating invasion of Ukraine by Russia on 24 February, the international condemnation was quick to arrive, and the impacts were felt immediately. The Russian rouble slumped to a record low against the U.S. dollar on Monday, depreciating 30% in the largest one-day move in the currency’s modern history, while the stock market had slumped 40% before trading halted.

In response, the Bank of Russia more than doubled interest rates to 20% in an emergency move, and told exporting companies to sell 80% of their foreign currency revenues in an attempt to support the rouble.

The market freefall came following a raft of stringent Western sanctions that effectively froze the majority of Russia’s foreign currency reserves—estimated at over USD 640 billion—and blocked a number of domestic banks from the SWIFT international payment settlement network in a bid to cause a banking crisis.

Pre-empting the moves, the Bank of Russia sold around USD 1 billion in reserves in the days leading up to the sanctions. Still, the rouble’s collapse revealed an isolated government facing serious economic distress.