Ruble plunges 20% and falls to 80 per dollar – The Economist

Ruble plunges 20% and falls to 80 per dollar – The Economist

The collapse of the Russian currency was accentuated on Tuesday with a fall of over 20%, sinking to an unprecedented level of 100 rubles per euro and 80 rubles per dollar.

The Russian ruble collapsed on Tuesday despite the radical rise in interest rates of the Central Bank of Russia, standing under pressure to President Vladimir Putin, helpless against a currency crisis dramatic.

After a fall of 9.5% on Monday, unprecedented since the 1998 financial crisis, the collapse of the Russian currency is severely stressed Tuesday with a loss of over 20%, to reach an unprecedented level 100 rubles per euro and 80 rubles per dollar.

At the same time, the RTS stock index tumbled Moscow 17% and operated at a minimum since March 2009. “We are witnessing known to attack speculation against the ruble, “said Alexei Mikheiev expert VTB24 bank.

The sinking of the Russian currency (has fallen from 60% earlier this year against the dollar) has caused a panic among the population that changes devalued rubles for dollars or euros, two days before the highly anticipated annual press conference this Thursday, the Russian president.

All this occurs in a context of great political tension with the West, because of the role of Moscow in the Ukrainian crisis, and the risk for the Russian economy into recession.

In an attempt to curb the collapse of the ruble, the Russian Central Bank announced on Monday night one drastically increase its key rate, which rose from 10.5% to 17%, more than triple compared to earlier this year.

But after a brief spike 5% less than two hours Tuesday currency Russian returned to collapse to new lows.

The Central Bank of Russia then admitted that the situation was “critical” and promised to take steps.

“A lack of political response and in a context of decline of oil prices, all efforts by the central bank to stop the free fall of the ruble seem fruitless, “said Inna Mufteeva, economist at Natixis.

On Monday, contributing to the gloomy atmosphere, the Central Bank had warned that the collapse of oil prices could generate a contraction of almost 5% of the Russian economy in the next year.