Russian Ruble Gets Ransacked
As a result of sanctions levied on Russia, the Ruble gets absolutely demolished, falling to as low as 111 to the USD, compared to just 83 on Friday.
In response to the sanctions, the Bank of Russia raised their benchmark rates to 20% from 9.5%. The thought is to allure investments into banks, such as Verbank and VTP, which got rocked as a result of enacted sanctions. The Bank of Russia also halted trading on the stock market, and forced Russian companies to liquidate 80% of their foreign-currency revenue. The Russian Central Bank is hoping this will create more demand for Rubles. The 5 Year Russian Bond also went nuclear as speculation arose that Russia wouldn’t pay off foreign debts.
Jane Foley, head of foreign-exchange strategy at Rabobank stated “There is very little liquidity and consequently you get this gapping in the price and you’re not getting any real reflection of where the ruble would be…” Price action is just absolutely wild, and few know where the Ruble will eventually end up, but it is clearly seeing a lot of downward pressure. Russian banks are quite literally reeling and many are scared to hold Rubles.
Surprisingly enough, Bitcoin jumped ~12% in response to the sanctions, some much needed steam as the crypto market has also been bleeding as of recent. As with trading of the Ruble, we’re very curious to see where Bitcoin and the crypto cohort will go from here.