In response to the war against Ukraine, sanctions from the West have become a major economic and financial burden on the country.
Russian banks have boosted crucial interest rates to 20% in an attempt to defend the currency as major countries cut off funding to Moscow in the aftermath of its invasion of Ukraine.
- In an emergency action, Russia’s central bank hiked its benchmark interest rate to 20% from 9.5 percent on Monday. As the ruble fell to historic lows, authorities advised export-oriented businesses to sell foreign currency.
- On Monday, the ruble depreciated by 40% versus the US dollar. The European Central Bank said in a prepared statement that Russia’s state-owned Sberbank is “failing or likely to fail.
- According to the central bank and the finance ministry, Russia has also forced enterprises to sell 80 percent of their foreign currency income.
The key rate is the interest rate at which banks can borrow when their necessary reserves are insufficient.
- The Russian invasion of Ukraine has heightened tensions in the area. Global markets fell last week, with bitcoin falling as much as 10% in a single day before recovering slightly over the week as the United States issued penalties.
- Meanwhile, Ukraine has received over $10 million in cryptocurrency donations through an official account in order to assist civilians trapped in the crossfire.