Russian central financial institution bans gross sales of securities by foreigners, hikes charges to twenty p.c

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The Russian central financial institution banned gross sales of native securities by foreigners on Monday and hiked its key price to twenty p.c after the West imposed monetary sanctions in response to President Vladimir Putin’s invasion of Ukraine.

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Buying and selling on the foreign exchange market was delayed for 3 hours this morning and was as a result of open at 10 a.m. native time (8 a.m. CET), whereas different monetary markets will stay shut. On the interbank market the ruble was buying and selling down round 30 p.c at a brand new report low.

The central financial institution mentioned it had additionally determined to greater than double its key rate of interest to twenty p.c from 9.5 p.c following a “cardinal change in exterior situations.”

“A rise in the important thing price will make it doable to make sure a rise in deposit charges to the degrees essential to compensate for the elevated devaluation and inflation dangers,” the central financial institution said. “This may assist preserve monetary and value stability and shield residents’ financial savings from depreciation.”

Whereas the ruble will commerce, different monetary markets will stay closed till additional discover.

“The choice to open or to not open buying and selling will likely be introduced by the Financial institution of Russia at 13:00 Moscow time. In case of a optimistic determination, the public sale will open at 15:00 Moscow time,” the financial institution mentioned in a statement.

Revered former central banker and economist Sergei Alaksashenko mentioned on Sunday the Western monetary sanctions would hit Russia like a “financial nuclear bomb.” The measures deprive the central financial institution of entry to most of its $630 billion in worldwide reserves. 



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