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Ruble and Stocks Tumble on Ukraine Turmoil

Published: March 4, 2014 (Issue # 1799)



  • The ruble bottomed out at 37 per dollar on Monday morning before rebounding slightly. Tuesday’s rate is 36.38.
    Photo: For SPT

The ruble and equity market plummeted Monday morning following escalation in the Crimean crisis over the weekend, as rattled investors withdrew their capital en masse and latched onto the most ironclad assets they could find.

President Vladimir Putin on Saturday received authorization from the Federation Council to move Russian military forces into Ukraine "until the situation in the country is normalized," sparking fears of outright war and threats of economic sanctions from the West.

Related: Central Bank Tested as Ruble Falls to Record Lows

The ruble-denominated MICEX index lost $58.4 billion in market capitalization since the end of trading Friday, the worst sell-off since the crisis of 2008, Reuters reported.

The ruble fell to historically low levels in the morning, trading at 37 to the dollar and 50.7 to the euro and breaching the upper bounds of the 42.2 ruble corridor against the basket set by the Central Bank.

Anticipating instability, the Central Bank unexpectedly raised its key lending rate in the morning from 5.5 to 7 percent, and propped up the ruble by selling dollars.

Related: Economist Advises Russians to Dump Ruble, Buy Hard Currency

"There have been some $11 billion sold today, some $10 billion came from the Central Bank," said Mikhail Paley, a dealer at VTB Capital. The Central Bank still holds $493.4 billion in gold and foreign exchange reserves.

The increased lending rates will boost the cost of financing in rubles, which should in turn make the ruble more attractive for currency traders and ultimately stabilize the exchange rate, said HSBC chief economist Alexander Morozov, Vedomosti reported.

Other analysts doubted that the rate hike can prevent a further decline.

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ALL ABOUT TOWN

Monday, Jan. 26


Feeling stressed by the crisis? The Northwest Coach University at 3 Ulitsa Vostsstanaya is hosting a master class by lifecoach Tatiana Almazova. She will shed light on the coaching process, the usefulness of coaching during times of economic downturn and how coaching can improve your career and business prospects. The event starts at 7 p.m. and admission is free. Pre-register by calling 424 3700.



Discover the State Hermitage Museum's collection of English painting at a lecture by art historian Yelizaveta Renne at the Prince Galitzine Library, 46 Nab. Reki Fontanki. The event starts at 6 p.m. and the lecture will be followed by a concert of arias, songs and duets by English composer Henry Purcell. The event is free of charge.



Tuesday, Jan. 27


Celebrate the 71st anniversary of the end of the Siege of Leningrad on Palace Square with a free concert at 7 p.m. Listen to WWII-era songs and the poetry of Olga Bergholz while you peruse outdoor exhibitions dedicated to life during wartime. The event is capped off by a fireworks display at 9 p.m.



Stop by the Lexica School of Foreign Languages at 73 Ligovsky Prospekt from now until Friday for a free English lesson. The classes start at 7 p.m. and cover all levels, from Beginner to Advanced. Registration by telephone on 7641692 and a desire to improve your skills are the only prerequisites.



Wednesday, Jan. 28



Feel like becoming a publishing mogul? Stop by the Freedom anti-cafe at 7 Ulitsa Kazanskaya today at 8 p.m. where Simferopol, Crimea-based founder and chief editor of the Holst online magazine will talk about creating an internet magaine, including what stories to cover, how find an audience and build a team, where to find inspiration and how to stand out from the crowd. Admission is the normal price of the anti-café — 2 rubles per minute, which includes tea and snacks.



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