Russia's central bank hikes interest rates to 20% and buys gold as the ruble crashes to a record low following tough Western sanctions

The ruble has gone into freefall after the West imposed tough new sanctions over the war in Ukraine, so the central bank more than doubled its interest rates on Monday.

The Bank of Russia said on Sunday that it would resume buying gold in the domestic market as it tries to shore up its finances and find ways around sanctions.

The ruble crashed to a record low against the dollar in Europe on Monday. At 3.20 a.m., it was at108 rubles per dollar.

The central bank decided to raise its main interest rate from 9.5% to 20% in order to limit the damage. The idea is that higher interest rates will increase the return to investors and push up the exchange rate.

It banned brokers from selling securities on behalf of non-residents in order to halt the decline in domestic asset prices. The opening of the stock market was delayed. Moscow time is 7 a.m. If at all. The market was closed at the time of writing.

13 investing experts share their outlook on the Fed's likely response, short- and long-term trades, and whether or not bitcoin can ever become a safe-haven asset.

The US and its allies hit the country with tough new sanctions over the weekend after Russian President Vladimir Putin started what could be the biggest European conflict since World War II.

They have stopped certain Russian banks from using the global payments system, which is crucial to international money transfers. Analysts said the move is likely to hurt the economy.

The US, European Union, UK, Canada and others have imposed sanctions on the central bank because they intend to stop it from using its international reserves to undermine other sanctions.

The sanctions could cause a lot of problems in Russia. A collapsing currency can cause a lot of problems, as it can drive up the cost of imports and cause inflation. It makes a country less attractive to foreign investors due to the high levels of economic uncertainty.

Neil Shearing, chief economist at Capital Economics, said that the conditions in which runs on local banks begin.

A bank run is when a lot of people try to withdraw their money at the same time. There was a panic in Russia on Monday.

Shearing said that all of this will accelerate Russia's economic downturn.

As the currency fell, scores of Russians lined up to withdraw cash from bank ATMs.