Ukraine conflict: Russian rouble plunges after new sanctions announced

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The rouble plummeted against the dollar after Western nations imposed new sanctions against Russia.

The Russian currency has hit a new low after some of the country's banks were banned from using the Swift international payment system.

Russia's central bank appealed for calm on Sunday amid fears that there could be a run on the country's banks.

Growing tensions helped push the price of crude oil above $100 a barrel.

The European Union, United States and their allies have imposed the most severe sanctions on Moscow over the conflict in Ukraine by cutting off a number of Russian banks from Swift.

Russia's ability to access its overseas reserves will be limited due to the frozen assets of the central bank.

The statement said that the intention was to further isolated Russia from the international financial system.

Russia is dependent on the Swift system for its oil and gas exports.

Unless the Russian central bank and Russia's largest banks find an alternative way to reach the global financial system, Russia will face Iran and North Korea-style isolation from the global economy.

Mr Redbord was a senior advisor to the Under Secretary for Terrorism and Financial Intelligence at the US Treasury Department.

"Financial markets are guided by the unfolding of events in Ukraine," said Ell.

She told the BBC that announcements regarding sanctions and military action will remain market moving this week.

Last week, Moody's said it was reviewing Russian bonds to see if they should be lowered to junk status, which would put Russia in a league of riskier countries that usually have to pay more to borrow. The country has been lowered to junk status by S&P.

Russia's central bank issued an appeal for calm over the weekend, fearing that the new financial sanctions could cause a run on its banks.

It said it has the necessary resources and tools to maintain financial stability.

There would be a lot of people trying to withdraw money. Russia's central bank was forced to increase the amount of money it gives to ATMs after demand for cash reached the highest level since March 2020.

A bank run is already ongoing and will most likely intensify in the coming days according to the head of investments at SMBC Private Wealth.

The military conflict will last longer than Putin expected and the reaction of the West and the global community might be more harmful than he expected.

The European Central Bank said on Monday that several European subsidiaries of Sberbank Russia, which is majority owned by the Russian government, are failing or likely to fail because of the war in Ukraine.

At the end of last year, Sberbank Europe AG had total assets of $13.64 billion.

The Russian rouble fell to a new record low against the US dollar in the first day of trading. The price of oil went up while the euro went down.

The measures introduced this weekend increase the financial and social costs of the invasion.

Russians are waiting in long lines because they are worried that their bank cards will stop working or that limits will be placed on the amount of cash they can withdraw.

The European operations of Sberbank, the Russian state owned bank, are failing according to regulators.

The ban on the Central Bank of Russia using its foreign reserves undermines its ability to defend the rouble. The weakness of the currency is likely to cause inflation to go up.

The central bank has a few options, including raising interest rates or limiting the amount of money that can be brought into or out of the country.