How Putin's Invasion Of Ukraine Already Cost The Russian Central Bank $10 Billion
REUTERS/Sergei Karpukhin
According to a trader at ING cited by Bloomberg News, the central bank sold more than $10 billion of its dollar reserves this morning in exchange for rubles in the open market in order to prop up the value of the ruble. The IMF estimates that at the end of January, Russia's stock of foreign reserves totaled $457.2 billion.
Basically, when a central bank wants to prop up its currency, it dips into its foreign exchange cashpile and buys its own currency on the open market.
The central bank also unexpectedly hiked its key benchmark policy interest rate to 7% from 5.5% in an effort to stem the ruble's decline.
The dollar is still up 1.4% today against the ruble, but the Russian currency has pared losses from earlier this morning, when the dollar was up even more.
The latest decline in the ruble on the back of escalating military tensions pushes the ruble into territory that the Central Bank of Russia can no longer ignore, given its effect on inflation.
- I got a $40K raise using this 30-second strategy. It made me realize loud work, not hard work, always wins.
- A millennial manager went viral after her Gen Z assistant picked up a work call while at the hair salon: 'Go off queen'
- Qatar Airways' new CEO explains why it's sticking with the Airbus A380 as other airlines retire the costly superjumbo
- Kia India looks to expand sales, service network to 700 touchpoints by year-end
- Shapoorji Pallonji’s Afcons Infra files DRHP for ₹7,000 crore IPO
- Water crisis affects businesses across Bengaluru; Is there room for cautious optimism?
- BenQ Zowie EC2-CW review – Premium wireless mouse for gamers
- Banks' GNPAs set to improve further to 2.1 pc by FY25: Care Ratings