Foreign Affairs

Russian Ruble Is Now Worth Less Than 1 U.S. Cent After SWIFT Bank Sanctions.

28 Feb 2022
Russian Ruble Is Now Worth Less Than 1 U.S. Cent After SWIFT Bank Sanctions.

The ruble plunged to a record low of less than 1 U.S. cent in value Monday after Russia was cut off from the global bank payments system in retaliation for Moscow’s invasion of Ukraine.

The Russian currency dropped nearly 26% to 105.27 per dollar, down from about 84 per dollar late Friday.

The U.S., Japan and other Western nations moved over the weekend to impose additional sanctions against Russia, including restrictions on access for some Russian banks to the SWIFT global bank payments system.

Restrictions on the Russian central bank target its access to more than $600 billion in reserves the Kremlin has at its disposal, hindering its ability to support the ruble after it fell last week to its lowest level ever.

The decline of the ruble would likely send inflation soaring, hurting all Russians and not just the Russian elites who were the targets of earlier sanctions. The resulting economic disruption, if Saturday’s measures are as harsh as described, could leave Putin facing political unrest at home.

Analysts predicted intensifying runs on banks by Russians, and falling government reserves as Russians scrambled to sell their targeted currency for safer assets.

The SWIFT financial messaging system daily moves countless billions of dollars around more than 11,000 banks and other financial institutions around the world.

Allies on both sides of the Atlantic also considered the SWIFT option in 2014, when Russia invaded and annexed Ukraine’s Crimea and backed separatist forces in eastern Ukraine. Russia declared then that kicking it out of SWIFT would be equivalent to a declaration of war and the allies shelved the idea. Russia since then has tried to develop its own financial transfer system, with limited success.

The disconnection from SWIFT announced Saturday was partial, leaving Europe and the United States room to escalate penalties later. Officials said they had not fully settled on which banks would be cut off and that the aim was for targeted, functional restrictions.

https://time.com/6152156/russian-ruble-plunges/


LinkedIn share link Twitter share link Facebook share link Whatsapp

0 comments


Leave a Reply

Special Ads

Hello, I'm
Aishat Akinbami

I'm a content writer. I'm passionate about creating compelling content that connects with readers and inspires them to take action. My writing focuses on topics related to technology, business, lifestyle, travel, news articles, and more. I have a knack for finding the perfect words to convey a message, and I'm constantly reading, researching, and learning about new topics. I also love to stay up to date on the latest content marketing trends and best practices.

Trending Now

Latest Post

Categories