Reduced To Rubble

The rouble will be in focus today after Russia was hit by further rounds of Western sanctions, which include cutting selected Russian banks off the SWIFT payment system and measures to prevent the CBR from accessing its foreign reserves.

• Former Russian Central Bank Deputy Chairman Sergei Aleksashenko told Reuters that the sanctions mean "there is going to be a catastrophe on the Russian currency market on Monday." In his opinion, "they will stop trading and then the exchange rate will be fixed at an artificial level just like in Soviet times."
• Separately, the WSJ cited Aleksashenko as noting that "the plunge in the currency's value of 30% to 40% would add about 5 percentage points to inflation," which could "rise even more if disruptions to the payments system reduce the supply of goods."
• Reuters reported that the rouble "was quoted on dealing sites at between 98.00 to 100.00 per dollar," while "dealers said liquidity was non-existent with nobody wanting to make a price in the currency so all rates were merely indicative." The news agency noted that one dollar bought around 107 roubles on EBS.
• WSJ journalist Paul Sonne tweeted that [an online] Russian bank Tinkoff is "now offering to exchange roubles for dollars at a rate of 171 roubles per dollar." Meanwhile, numerous press reports showed people queueing up in front of ATMs across Russian cities.
• Spot USD/RUB closed below RUB84.00 on Friday after printing an all-time high of RUB90.00 the day before.