Ruble sees record drop after new Western sanctions

The Russian ruble fell to a record low against the dollar on Monday after Western nations announced a set of tough sanctions over the weekend to punish Russia for its invasion of Ukraine, including restrictions on the country’s currency reserves.

The ruble even dropped to 119.50 per dollar in Asian trade, a record low of 30% from last Friday’s close. It later recovered to around 110 per dollar.

Russian President Vladimir Putin ordered his military command to put nuclear-armed forces on high alert on Sunday in response to Western reprisals for his war on Ukraine – the biggest attack on a European state since World War II. world.

Russia’s central bank (CBR) announced a series of measures on Sunday to support domestic markets as it struggles to manage the fallout of sanctions that will block some of the country’s banks from the Swift international payments system.

The bank said it will resume buying gold on the domestic market, launch an unlimited buyback auction and ease restrictions on banks’ open foreign currency positions.

The currency found some support last week, with the first monetary interventions by the Russian central bank since 2014, when Moscow annexed Crimea from Ukraine.

Rabobank analysts said the monetary reserve sanctions removed what little support the ruble had.

“Even gold is not liquid if no one can use the exchange in exchange for it. There will be a complete collapse of the ruble today,” they wrote.

Ray Attrill, head of foreign exchange strategy at National Australia Bank, said in a note on Sunday that “a ruble collapse seems inevitable on Monday morning” and that there was an increased risk of Russian debt default as a result of the events of the end. of week.