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The Moscow Stock Exchange remains closed |  Hollandsposten

The Moscow Stock Exchange remains closed | Hollandsposten

The message came at 11 Swedish time, which is 13 local time in Moscow. Because of the “emerging situation”, the Russian Central Bank chose to keep the Moscow stock exchange closed after previously delaying the exchange’s opening during a turbulent morning.

The background is the Russian Central Bank’s interest rate announcement of a key rate hike from 9.5 to 20 percent – the highest level in nearly 20 years.

choose capital

This is, among other things, to encourage Russian families to keep their capital in banks, which does not seem to be the case. Instead, the photos show how Russians stand in line at ATMs, primarily picking up foreign currency savings.

– The purpose is to make the ruble more attractive, but I am a little surprised. If you’re still going to raise the interest rate, 20 percent is in the lower team if you want to avoid a financial crisis. It’s a fairly moderate increase, I could have imagined a 50 percent increase, Per Hammarlund tells TT.

He now estimates that there will be several rate hikes from the central bank soon. In addition, the Russian population may be ready for further restrictions.

The problem is that if people continue to withdraw money, the banks will run out of money and this will lead to the withdrawal of loans and the sale of financial assets, which may lead to a financial collapse.

TT: Does that mean you’ll see withdrawal restrictions?

Yes, in short. Today and tomorrow are very important for how the central bank handles the situation. If you continue at this pace, we will see a financial crisis in Russia already this week. And now it is decided.

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In the afternoon, it was also reported that Russian citizens were forbidden to take the capital out of the country.

Introducing capital controls

A ban was also imposed on brokers to sell securities owned by foreign investors on the Moscow Stock Exchange, all while the Russian ruble fell by about 30 percent in value.

For now, Per Hammarlund points out that it is primarily a Russian crisis but may have an impact beyond Russian borders as well.

– There will be a decrease in trade with Russia, which will provide a macroeconomic diffusion and will affect the immediate region of Russia.

Russian Central Bank Governor Elvira Nabiullina said at a press conference this afternoon that all necessary tools will be used to deal with the “abnormal situation”.

– She said we will continue to make decisions based on development and risk assessment.