Russia refuses to open MOEX as interest rates hit 20%

Russia’s central bank said it would not open the Moscow Exchange on Monday as interest rates were doubled to 20 per cent.

Videos are emerging of massive queues at ATMs in Russia, as residents desperately scramble for cash and the nation’s economy teeters on the brink of collapse.

One clip from Moscow shows an enormous line forming following the rapid fall in the value of Russia’s ruble against the US dollar.

The collapse threatens to wipe out Russia’s buying power and destroy the savings of ordinary citizens.

Russia’s central bank said it would not open the Moscow Exchange on Monday.

It comes after the US announced brutal new economic punishment for Russia’s invasion of Ukraine.

Russian ruble price collapses

The ruble had already fallen sharply against the main world currencies and many Russians queued at ATMs, hoping to withdraw ruble savings and exchange them for foreign currency before rates plunged further.

В Москве и других городах России перед банкоматами собираются огромные очереди. Фото сделано в 5 часов утра. pic.twitter.com/lpSrIM4Ao9

— Oles Filonenko 🤷🏼‍♂️ (@taxfreelt) February 27, 2022

In the wake of sanctions announced on Monday, the value of Russia’s currency, the ruble, plunged by as much as 40 per cent against the US dollar.

President Vladimir Putin raged against the West as he convened a meeting with officials including central bank chief Elvira Nabiullina and the CEO of Russia’s largest lender Sberbank, German Gref, to address what the Kremlin called a new “economic reality”.

“The Western community, which I called ‘the empire of lies’ in my speech, is trying to implement sanctions against our country,” Mr Putin said.

The UK, along with the US and EU, have cut off Russia’s banks from financial markets in the West and stopped dealings with the central bank, state-owned investment funds and the finance ministry.

Russia refuses to open stock market

Russia’s central bank said it would not open the Moscow Exchange on Monday.

The Central Bank of Russia initially delayed the opening the stock market by three hours and then announced it would remain closed all day.

Moscow is scrambling to prevent foreign investors from selling Russia securities.

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The MOEX crashed last time trading was open.

Russian interest rates soar

Interest rates in Russia have been doubled to 20 per cent.

The extreme measure to increase the country’s key interest rate from 9.5 per cent to 20 per cent was “designed to offset increased risk of ruble depreciation and inflation,” the country’s central bank said.

It also announced it would free 733 billion rubles in local bank reserves to boost liquidity.

The central bank declared that Russian resident companies that earn income from exports from Monday will have to sell 80 per cent of their foreign currency earnings.

US announces crippling new punishment

The US will ban the Russian central bank from American dollar transactions, the White House has announced in a crippling new punishment for the invasion of Ukraine.

Washington will also fully block the Russian direct investment fund, CNN reports.

The steps are aimed and stopping Russia from accessing US$630 billion in foreign reserves that Moscow had hoped to rely on during the invasion of Ukraine.

“No country is sanction proof,” a White House official said.

“Putin’s war chest of $630 billion in reserves only matters if you can use it to defend his currency, specifically by selling those reserves in exchange for buying the ruble.

“After today’s actions that will no longer be possible, and fortress Russia will be exposed as a myth.”

A White House official said the measures had been planned for months, meaning that could be rolled out immediately.

“Our strategy, to put it simply, is to make sure that the Russian economy goes backward as long as President Putin decides to go forward with his invasion of Ukraine,” an administration official told CNN.

A woman walks past a currency exchange office in central Moscow. Picture: Alexander Nemenov / AFP

Ruble crashes amid Western sanctions

The collapse took place on the Moscow Stock Exchange on Monday as the West punished Moscow with new sanctions over the Kremlin’s invasion of Ukraine.

The ruble fell sharply at the start of 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 came after the ruble-based MOEX index increased the upper trading limit. That followed an announcement by the West that it would remove some Russian banks from the SWIFT bank messaging system, and freeze central bank assets.