Russia raised its policy rate to 20% from 9.5% raised on Feb. 11.
As of 1:30 CST.This halted the fall of the ruble, which has fallen by as much as Front month futures 30%and 40% at the start of the transaction.
It would be interesting to see what foreign exchange reserves look like.as discussed forwardliquid foreign exchange reserves were lower than international reserves, at $630 billion at the end of January.
Clearly 20% is unsustainable; it either throws the economy into a recession (if it persists) or is deemed untrustworthy (precisely because market participants don’t believe the government will endure such a recession).
Additionally, from Forex Live: “The Russian Ministry of Finance will reportedly introduce mandatory foreign exchange sales for companies. Russian companies will have to sell 80% of their foreign exchange earnings. This is related to the headline move by the Russian central bank to curb attempts to destroy the ruble.”
