The ruble is falling, stocks are sinking as the West tightens sanctions against Russia

TOKYO (AP) – The ruble has fallen to a record low of less than 1 US cent and most of the world’s stocks …

TOKYO (AP) – The ruble fell to a record low of less than 1 US cent, and most global stock markets fell on Monday after Western countries moved to block some Russian banks in the global payment system.

Russia’s invasion of Ukraine has led to sharp market fluctuations, given the potential impact on inflation, energy supplies and other economic consequences.

Putin’s order to increase Russia’s readiness for launch has heightened tensions with Europe and the United States and revived dormant Cold War fears.

Russia’s central bank has raised the key rate to 20% from 9.5% in a desperate attempt to support the fall of the ruble and prevent a raid on banks. This brought a temporary reprieve for the Russian currency, which returned to last week’s level, but not for long.

The ruble collapsed by more than 30% after Russian banks blocked the SWIFT payment system. The sanctions include restrictions aimed at restricting Russia’s central bank’s access to more than $ 600 billion in reserves and hampering its ability to support the ruble.

The weakening ruble is expected to lead to rising inflation, which could anger Russians whose budgets will be stretched due to rising prices. It will also increase tensions in Russia’s financial systems.

The German DAX fell 2.1% to 14,263.95 and the CAC 40 in Paris lost 2.3% to 6,595.83. The British FTSE 100 fell 1.7% to 7365.29.

In New York, the future for the S&P 500 was 1.6% lower, and for the Dow Industrials decreased by 1.3%.

On Friday, the S&P 500 rose 2.2%, marking its first weekly gain in three weeks. The Dow Jones Industrial Average was up 2.5% and the Nasdaq was up 1.6%. The Russell 2000 index rose 2.3%.

The end of the month usually brings a lot of economic data, but so far the conflict obscures other issues.

“It’s all about the situation between Russia and Ukraine, and evolution in that situation will drive market sentiment and direction,” Jeffrey Hali of Oanda said in a comment.

“President Putin will now have to come to terms with the fact that Western powers are ready to take on enough economic pain to punish Russia,” he said.

Markets in Asia seem to have taken recent developments more calmly.

The Japanese Nikkei 225 index recovered from previous losses and rose 0.2% to 26,526.82. Hong Kong’s Hang Seng lost 0.2% to 22,713.02. The Shanghai Composite Index rose 0.3% to 3,462.31. Cospi in Seoul rose 0.8% to 2,699.18, while in Sydney the S&P / ASX 200 rose 0.7% to 7,049.10.

Although Asia is unlikely to suffer direct damage from the war in Ukraine, higher energy prices are an undesirable burden for oil-importing countries such as Japan, especially while they are still trying to recover from the pandemic. .

Emphasizing the deepening differences due to the conflict, BP said on Sunday it was leaving its 19.75% stake in Rosneft, a state-controlled Russian oil and gas company it has held since 2013. This share is currently estimated at $ 14 billion.

In electronic trading on the New York Mercantile Exchange, oil prices rose on Monday: on US benchmark oil by $ 4.33, or 4.7%, to $ 95.92 per barrel. On Friday, it lost $ 1.22 to 91.59 per barrel.

Brent crude rose $ 4.20 to $ 98.32 a barrel, up 4.5% from $ 100 a barrel last week.

The conflict in Ukraine has added to the uncertainty of other concerns about interest rates and inflation.

The US Federal Reserve has suggested that next month will raise short-term interest rates by half compared to the usual increase, which is the first rate increase since 2018. Higher U.S. rates tend to put downward pressure on all types of investments and can have global implications.

In foreign exchange trading, the US dollar fell to 115.61 Japanese yen from 115.77 yen. The euro rose to $ 1.1165 from $ 1.1157.

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