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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. Tuesdays 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

Friday, Oct. 31


Put your grammar and logical thinking to the test in a fun and friendly environment during the British Book Centers Board Game Evening starting at 5 p.m. today. The event is free and all are welcome to attend.



Saturday, Nov. 1


The men and women who dedicate their lives to fitness get their chance to compete for the title of best body in Russia at todays Grand Prix Fitness House PRO, the nations premier bodybuilding competition. Not only will men and women be competing for thousands of dollars in prizes and a trip to represent their nation at Mr. Olympia but sporting goods and nutritional supplements will also be available for sale. Learn more about the culture of the Indian subcontinent during Diwali, the annual festival of lights that will be celebrated in St. Petersburg this weekend at the Culture Palace on Tambovskaya Ul. For 100 rubles ($2.40), festival-goers listen to Indian music, try on traditional Indian outfits and sample dishes highlighting the culinary diversity of the billion-plus people in the South Asian superpower.



Sunday, Nov. 2


Check out the latest video and interactive games at the Gaming Festival at the Mayakovsky Library ending today. Meet with the developers of the popular and learn more about their work, or learn how to play one of their creations with the opportunity to ask the creators themselves about the exact rules.



Monday, Nov. 3


Non-athletes can get feed their need for competition without breaking a sweat at the Rock-Paper-Scissors tournament this evening at the Cube Bar at Lomonosova 1. Referees will judge the validity of each matchup award points to winners while the citys elite fight for the chance to be called the best of the best. Those hoping to play must arrange a team beforehand and pay 200 rubles ($4.80) to enter.



Tuesday, Nov. 4


Attend the premiere of Canadian director Xavier Dolans latest film Mommy at the Avrora theater this evening. The fifth picture from the 25-year-old, it is the story of an unruly teenager but the most alluring (or unappealing) aspect is the way the film was shot: in a 1:1 format that is more reminiscent of Instagram videos than cinematic art. Tickets cost 400 rubles ($9.60) and snacks and drinks will be available.



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