Russias Currency Tumbles as Investors Panic By Kirit Radia November 7, 2014 1:33 PM MOSCOW - Russias currency suffered its worst week since the financial crisis of the 1990s destroyed the countrys economy, dropping over 10% in just the last couple days. With Russia teetering on the brink of recession and buffeted by fleeing investors, plummeting oil prices, costly adventures in Crimea and Ukraine, and the resulting Western sanctions, the ruble hit an historic low of 48.60 rubles to the U.S. dollar this morning. The decline has contributed to inflation in Russia, which had already accelerated after Russia banned certain foods from Europe and the United States in response to Western sanctions. Food prices in particular have shot up, affecting many Russians with low or fixed incomes in President Vladimir Putins political base. The Central Bank had been trying to walk away from its longstanding policy of unlimited interventions to support the ruble. At one point last month it was spending around $2 billion each day to prop up the currency. But after the bank announced plans to abandon that approach this week, the floodgates opened. Russian media reported many Russians raced to convert their savings into foreign currencies, further driving down the rubles value. According to some reports, dollars and euros are in short supply in Moscow.
Posted on: Thu, 20 Nov 2014 00:56:24 +0000
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