Russian Central Bank Raises Interest Rate from 9.5% to 20%... Ruble Hits Record Low Value

Rubel Value Plummets 30% in One Day

Military facility in southern Ukraine emitting smoke after being destroyed by Russian attack
(Mariupol AP=Yonhap News) On the 24th (local time), a Ukrainian military facility and equipment on the outskirts of Mariupol in southern Ukraine were destroyed by an attack from Russian forces, emitting smoke. Ukrainian authorities stated that on this day, Russian forces began invading from the north, east, and south of the Ukrainian border using missiles and other means. 2022.2.25
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[Asia Economy Sejong=Reporter Lee Jun-hyung] As major countries increase sanctions by excluding Russian banks from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) payment network, the Russian financial market is shaking, with the ruble hitting an all-time low. In response, the Russian Central Bank sharply raised the benchmark interest rate and resumed gold purchases for the first time in two years.

Ruble Value Drops 30%

According to major foreign media on the 28th, the ruble exchange rate (the inverse of the ruble's value) rose to 119.50 rubles per dollar during the Asian foreign exchange market session, causing the ruble's value against the dollar to plunge 30% compared to the previous trading day. Reuters reported that the ruble's value fell to an all-time low.

A dollar hoarding phenomenon also occurred. In Russia, scenes of Russians lining up in front of automated teller machines (ATMs) to withdraw dollars were observed the day before. Despite local Russian banks selling dollars at 100 rubles per dollar?more than one-third higher than the ruble exchange rate closing price on the 25th?dollar hoarding took place. This appears to be a result of fears that the ruble could collapse due to economic sanctions imposed by major Western countries.

The United States and the European Union (EU) agreed to exclude Russia from the SWIFT payment network and freeze the Russian Central Bank's foreign exchange reserves as countermeasures against Russia's invasion of Ukraine. Europe also decided to ban Russian aircraft from flying in European airspace, and popular payment systems in Russia, such as Apple Pay, were suspended.

Ukrainians residing in Korea are marching near the Russian Embassy in Jung-gu, Seoul on the 27th, condemning Russia's invasion of Ukraine. Photo by Dongju Yoon doso7@

Russian Central Bank Raises Benchmark Interest Rate from 9.5% to 20%

The Russian Central Bank immediately took measures to stabilize the financial market. On the day the ruble sharply fell, the Russian Central Bank raised the benchmark interest rate significantly from the current 9.5% to 20%.

The Russian Central Bank also announced financial market stabilization measures the day before. As part of these measures, the bank decided to resume gold purchases in the domestic market for the first time in two years. The bank expanded the range of securities that can be provided as collateral for loans and relaxed restrictions on banks' excess foreign exchange positions, whether buying or selling. Additionally, it instructed the financial industry to refuse requests from foreigners to sell Russian securities.

The world's largest sovereign wealth fund, the Norwegian Government Pension Fund, announced on the same day that it would sell its Russian assets. Norwegian Prime Minister Jonas Gahr Støre said at a press conference, "We have stopped new investments in Russia and started the process of selling Russian assets." As of the end of last year, the Norwegian sovereign wealth fund's Russian assets amounted to 25 billion kroner (approximately 3.37 trillion won), consisting of Russian government bonds and shares of about 40 Russian companies.

EU Ambassadors in Korea Express Solidarity with Ukraine
(Seoul=Yonhap News) Maria Castillo, Ambassador of the European Union (EU) to Korea (sixth from the right in the front row), and ambassadors of EU member countries in Korea held the Ukrainian and European Union flags and posed for a photo at the EU Delegation in Seoul on February 25 to show solidarity with Ukraine. 2022.2.25
[Provided by the EU Delegation to Korea. Redistribution and DB prohibited]
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Possible Bankruptcy of Russia's Sberbank European Subsidiaries

The European Central Bank (ECB) stated on the day that there is a high possibility of bankruptcy for Russia's Sberbank subsidiaries in Europe. Sberbank is a bank owned by the Russian government. It is listed on the U.S. export control list and is also excluded from the SWIFT payment network.

The banks the ECB pointed out as having a high risk of bankruptcy are 'Sberbank Europe' and its subsidiaries in Croatia and Slovenia, totaling three institutions. The ECB said these three banks are experiencing large-scale deposit withdrawals and are likely to be unable to repay debts or obligations on time soon. The Single Resolution Mechanism (SRM), responsible for the recovery and resolution of European banks, has granted a payment moratorium for these three banks. It plans to review whether to rescue these three banks afterward.

This content was produced with the assistance of AI translation services.