The ruble It has collapsed this Monday in the Forex market almost 30% against the dollar and the euro after the announcement of some banks of the international interbank communications system SWIFT and the paralysis by the European Union of transactions with the Central Bank of Russia (BCR).
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Shortly after 09:00 local time (06:00 GMT) the ruble lost 28.34% against the greenback, whose exchange rate stood at 107.48 dollars per ruble. The Russian currency fell by 27.02%, to 119.8 euros per ruble.
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In the case of the dollar, this is a record drop since at least 1993 and in the case of the euro it is the biggest drop since at least 1994. The exchange rate of the ruble began to fall due to the military offensive launched last Thursday by Russia in Ukraine. That day the Moscow Stock Exchange plummeted more than 33%.
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In a first move, the West sanctioned several Russian banks and sovereign debt, and in a second decided to exclude some financial entities from SWIFT.
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The MOEX index of the Russian parquet begins to operate normally at 06:50 (03:50 GMT), but the BCR has indicated this Monday in a statement that operations in the foreign exchange market, the money market and the repo market will open today only to 10:00 a.m. (07:00 GMT).
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Of course, he clarified that he is still evaluating the feasibility of opening operations in other markets, “depending on the development of the situation.”
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“The decision to open or not to open operations will be announced by the Bank of Russia at 1:00 p.m. (11:00 GMT). In case of a positive decision, the auction will open at 3:00 p.m. (1:00 GMT),” he explained.
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The Russian Central Bank takes measures to ensure the liquidity of banks
The Bank of Russia has also taken measures to ensure the financial stability of the sanctioned banks, such as the release of accumulated capital reserves worth 733 billion rubles (6,245 million euros or 6,963 million dollars) for consumer loans and mortgages.
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“As part of its countercyclical macroprudential policy, the Bank of Russia will dissolve the accumulated macroprudential capital buffer for consumer loans and unsecured mortgage loans in rubles and foreign currency from February 28, 2022 (733 billion rubles as of February 1). February 2022) ”, the monetary entity has indicated in a statement. The duration of the measure is indefinite.
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“The Bank of Russia recommends restructuring the debt, not imposing sanctions and fines, if the financial situation of borrowers deteriorated after February 18 as a result of sanctions”, the institution notes.
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The BCR applies a similar measure for the repayment of the debt, he has indicated. It gives banks in Russia the ability not to worsen the assessment of the quality of debt service, regardless of the assessment of the financial position of their clients under restructured loans.
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The Bank of Russia is also introducing a temporary ban on brokers executing transactions to sell securities on behalf of non-residents from February 28, 2022.
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Outside of SWIFT
The BCR takes these measures after the US, the European Union and other partners sanctioned several banks in the face of the war launched by Russia in Ukraine and decided in a second step to exclude some Russian banks from the SWIFT international interbank communications system.
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The EU also formalized this Sunday night the paralysis of transactions with the Central Bank of Russia, an unprecedented blow to the country’s economy in response to the invasion of Ukraine.
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The banks excluded from this interbank payment system will be among those that have already been previously sanctioned by the EU; on that list are Sberbank, Vneshtorgbank (VTB), Gazprombank, Russian Agricultural Bank and Vnecheconombank (VEB), Alfa Bank and Bank Otkritie.
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The precise list of sanctioned entities will be known this Monday.
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