As Russian guns pound targets in Ukraine, one piece of the Russian government is taking an even worse pounding — its currency.
The ruble, which was wobbly last week after Russia launched its invasion, has hit its weakest level ever against the dollar, according to WCNC-TV.
“Russian bank Tinkoff now offering to exchange rubles for dollars at a rate of 171 rubles per dollar. It was 83 before the European/US announcement about targeting the Russian central bank. Currency market formally opens tomorrow. This is brutal,” Paul Sonne, a reporter for The Washington Post, tweeted.
Russian bank Tinkoff now offering to exchange rubles for dollars at a rate of 171 rubles per dollar. It was 83 before the European/US announcement about targeting the Russian central bank. Currency market formally opens tomorrow. This is brutal. pic.twitter.com/NsTBI4tvTZ
— Paul Sonne (@PaulSonne) February 27, 2022
Daleep Singh, Deputy National Security Advisor for International Economics in the Biden administration, said the ruble was at its “weakest value on record against the U.S. dollar” last week, even before it weakened further over the weekend.
Russia’s stock market “plunged over 30 percent at one point,” he said, before regulators intervened.
“I can’t see a scenario where it doesn’t get hammered,” said Paul McNamara, a fund manager at GAM Investments. “I don’t expect effective intervention in terms of pricing, but in terms of reducing legal grounds to sell rubles.”
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Within Russia, panic is taking shape.
“The situation is completely unstable, and sanctions and restrictions on the central bank can only get worse,” said Alexandra Suslina, a budget specialist at the Moscow-based Economic Expert Group.
“There’s already a bit of a rush to take money out of ATMs, but no cash machine is designed for the lines that will appear at sanctioned banks,” she said.
📉Russians are lining up at cash machines trying to ditch their rubles, despite them selling for *1/3rd less than Friday’s close.*
“I’ve stood in lines for an hour, but foreign currency is gone everywhere, just rubles,” said Vladimir https://t.co/aGb1t7Eou8
— Steven Dennis (@StevenTDennis) February 27, 2022
Bloomberg quoted who it said was a man it identified as Vladimir, a 28-year-old programmer, who was trying to exchange rubles for foreign currency at a Moscow ATM, Yahoo News reported.
“I’ve stood in lines for an hour, but foreign currency is gone everywhere, just rubles,” he said. “I got a late start because I didn’t think this was possible. I’m in shock.”
On Saturday, European nations and the U.S. exacerbated Russia’s economic troubles by announcing Russia was being banned from the Society for Worldwide Interbank Financial Telecommunication, known as SWIFT.
“We, the leaders of the European Commission, France, Germany, Italy, the United Kingdom, Canada and the United States condemn Putin’s war of choice and attacks on the sovereign nation and people of Ukraine,” read a statement announcing the action that was posted on the White House website.
Despite the tough talk, the sanctions carved out an exemption for energy-related transactions with Russia, upon which many European nations rely. The exemption was denounced by Ukrainian Foreign Minister Dmytro Kuleba, according to Fox Business.
To some European leaders who are still hesitant: each year at commemorative events you say ‘Never again’. The time to prove it is now. Russia is waging a horrific war of aggression in Europe. Here is your ‘never again’ test: BAN RUSSIA FROM SWIFT and kick it out of everywhere.
— Dmytro Kuleba (@DmytroKuleba) February 25, 2022
“I will not be diplomatic. Some countries are trying to leave loopholes, exclude a number of banks, so they can apply some measures with their left hands and continue to trade with Russia with their right hands,” Kuleba said.
“Stop doing this now. Stop trading with the blood of Ukrainian men, women and children. This is not a metaphor but the reality of what you are doing,” Kuleba said. “History will judge you, and your names will forever remain in history books as names of traitors to humanity. There are examples of such names in the 20th century. I am confident you do not want to add your names.”
He said the SWIFT ban should be total.
“It is critically important that Russia is disconnected from SWIFT on the fullest possible extent. All possible banks. Don’t play political games and stop earning money soaked in our blood,” he said.
Kuleba said purchases of oil and natural gas from Russia should be embargoed.
“These oil and gas now also contain Ukrainian blood. Anyone buying it has to be ashamed of doing so,” he said.