MOSCOW, March 3 (RIA Novosti) – Russia’s currency fell to a historic low on Monday as stock markets in Moscow lost more than 9 percent of their value within minutes of the opening of trading.
Such a crash was widely predicted by experts after Russia approved the use of military force in Ukraine on Saturday, prompting widespread condemnation from the international community.
Responding to what it described as “risks to financial stability,” Russia’s central bank increased interest rates by 1.5 percent Monday. The regulator has left interest rates unchanged for the last 18 months.
The dollar rose over 50 kopecks to 36.35 rubles and the euro climbed 55 kopecks to 51.2 rubles in morning trading, according to data from the Moscow Exchange.
The declines brought Russian currency plunging to levels outside the trading corridor mandated by the central bank, causing the regulator to announce that it was widening the target band by 20 kopeks.
The falling ruble was accompanied by sharp declines on Russia’s stock exchanges.
The MICEX bourse was down more than 9 percent under an hour after trading began at 10 a.m., while the dollar-denominated RTS lost over 10 percent.
Major Russian companies saw millions of dollars of value wiped out.
Shares in state-owned gas giant Gazprom, which is considered particularly vulnerable to events in Ukraine because of its extensive pipeline system in the country, fell by almost 11 percent.
Trading of steel and mining company Mechel was temporarily halted as its shares fell 26 percent.
“[We are] understandably seeing sellers across the board,” one major US investment bank based in Moscow wrote in a note to clients Monday.
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