Russia has more than doubled its key interest rate after the Ruble slumped by 30 per cent against the US Dollar. The Bank of Russia said it raised the rate to 20 per cent from 9.5 per cent to help cushion the impact on prices of the Rouble's slide. The move came after Western nations announced new sanctions against Russia over its invasion of Ukraine.
The ruble collapsed against the Dollar and the Euro on the Moscow Stock Exchange on Monday as the West punished Moscow with harsh new sanctions over the Kremlin's invasion of Ukraine and some of the country's banks were banned from using the SWIFT international payment system and froze and freezing central bank assets.
The Ruble fell sharply at the start of currency trading, reaching 100.96 to the Dollar, compared to 83.5 on Wednesday, the day before the invasion of Ukraine, and 113.52 to the Euro, compared to 93.5 before the assault. This fluctuation came after the Ruble-based MOEX index increased the upper trading limit. The Ruble later rallied slightly to 98.6 to the Dollar and 108.7 to the Euro.
Russia's central bank announced that it would not open share trading at the Moscow stock exchange on Monday "due to the situation that has arisen".
It said that it would make an announcement about trading for the next day by Tuesday morning.
The Kremlin acknowledged the impact on Monday, with spokesman Dmitry Peskov saying that "the Western sanctions are hard, but our country has the necessary potential to compensate the damage."
President Vladimir Putin was set to meet officials including the central bank chief Elvira Nabiullina and the CEO of Russia's largest lender Sberbank, German Gref, to discuss the economy.
The ruble had already fallen sharply against the main world currencies due to the erupting conflict.
On Sunday, Russia's central bank appealed for calm amid fears that there could be a run on the country's banks. Growing tensions also helped push Brent crude oil above $100 a barrel.
Russia is heavily reliant on the SWIFT system for its key oil and gas exports.
"Unless the Russian central bank and Russia's largest banks - which have already been cut off from correspondent banking - find an alternative means of reaching the global financial system Russia faces Iran and North Korea-style isolation from the global economy," Ari Redbord from blockchain analytics firm TRM Labs told the BBC.