Russian central bank buys up roubles to avert stock market collapse
The Russian central bank has purchased millions of roubles to prevent the collapse of the Moscow stock exchange and prop up the currency after it plunged to an all-time low of 89.60 against the dollar.
In a scramble to prevent the invasion of Ukraine pushing Russia’s financial system into meltdown, officials in Moscow closed the stock exchange while the Bank of Russia mounted a rescue operation to put a floor under the skidding rouble.
By midday the stock market had reopened and the rouble recovered to trade at 84 to the dollar, though analysts said an escalation of the war could force the central bank to intervene further to prevent the currency sinking to an even lower all-time low.
“To stabilise the situation on the financial market, the Bank of Russia decided to start interventions on the currency market,” the central bank said.
Russia’s main stock exchange fell 30% after reopening, while the MSCI index of shares in Russian companies traded in London and New York dropped 45%.
Kremlin spokesperson Dmitry Peskov said Russia had created a financial safety net to withstand market volatility and said the “emotional” reaction from the financial market to Russia’s invasion of Ukraine would even out.
He added that all necessary measures were being taken to ensure the market reaction was as brief as possible.
After weeks of denying plans to attack Ukraine, Russian forces fired missiles at several Ukrainian cities and landed troops on its coast, prompting analysts to predict that severe pressure on global financial markets was likely to persist over the coming weeks.
Russia’s currency, bonds and stocks all sank before its central bank announced its first foreign exchange intervention designed to shore up financial stability since
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