The Russian Central Bank has announced that it will begin to intervene in the foreign exchange market after the Russian currency plunged to a record low following the Russian military intervention in Ukraine.
“The Bank of Russia will ensure the maintenance of financial stability and business continuity of financial institutions by using all the necessary tools,” the bank said in a statement.
It did not mention raising interest rates, but said additional liquidity will be provided for bank by offering 1 trillion Russian roubles (some $11.5 billion) in the overnight repo auction.
The rouble tumbled to a record low of 89.98 per dollar and Russian stocks collapsed 45% after Russia attacked Ukraine.
The currency was nearly 7% weaker against the US dollar.
The Moscow stock exchange reopened trading after suspending it for a few hours.
Tougher sanctions by the US and the EU are on the way to face Russia as it started a military intervention in Ukraine.
US President Joe Biden announced the first tranche of sanctions against Russia on February 22 in response to Moscow’s recognizing two breakaway regions of eastern Ukraine, Donetsk and Luhansk.
On February 23, he said the US was expanding sanctions to the Nord Stream 2 AG, the company that built a key gas pipeline from Russia to Germany, and its corporate officers.
Meanwhile, European Commission President Ursula von der Leyen announced that the EU will freeze Russian assets and block Russian banks from accessing the financial market to severely damage the Kremlin’s ability to finance the war.