Asian Markets Lower on Global Growth Doubts

Russia’s rouble went into free-fall in Tuesday trading, falling repeatedly to hit record lows, despite the central bank’s dramatic decision to raise interest rates from 10.5% to 17%.

The rate rise was meant to strengthen the currency.

It helped it to 58 to the dollar early on Tuesday, but the dollar at one stage bought as many as 79 roubles.

The rouble has lost more than half its value against the dollar this year, hit by cheaper oil and Western sanctions.

Both of these have weakened the Russian economy.

Russia’s central bank has now pledged fresh further measures to try to stabilise its currency, with First Deputy Governor Sergei Shvetsov describing the situation as “critical”.

Share prices in banks thought to have exposure to Russia were down sharply. In Paris, Societe Generale was down 4.2% and shares in Italy’s Unicredit also fell.

However, the Russian stock market was higher, with the main Micex index up 2% in afternoon trading.

via BBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza