News of Russia’s invasion of Ukraine has dominated the media headlines, and led to much suffering in the country of over 44 million people.
Now, Russia is feeling the hurt itself after the value of the country’s currency dropped to a record low today, since the country has been cut off from the global bank payments system.
The ruble dropped nearly 26% to trade at 105.27 per dollar, down from about 84 per dollar late on Friday, in a shift that cause cause inflation to surge and could cause a massive strain on the Russian financial system and people.
According to CNN, the Russian central bank responded by more than doubling interest rates to 20%, and the Moscow stock exchange closed for the day.
The currency’s drop came after Western leaders imposed a range of sanctions against Vladimir Putin’s country in an effort to bring an end to the invasion launched on February 24.
The sanctions include restricting access for some Russian banks to the SWIFT global bank payments system.
Other currencies reportedly have not been hit as hard according to a report from Reuters.
“There is clearly weakness in east European currencies even outside of the ruble… but at the same time they are not really weakening to new record lows or anything like that,” said Brad Bechtel, global head of FX at Jefferies, in New York.
Ursula von der Leyen, the commission president of the European Commission, announced that the EU would “ban the transactions of Russia’s central bank and freeze all its assets” while announcing sanctions last week.
Meanwhile, the United States banned U.S. dollar transactions with the Russian central bank.
The UN said that over 500,000 people have fled Ukraine to neighboring countries as a result of the invasion. An emergency meeting was also held by the UN Assembly General as well.
The White House added that it may ban Russian flights this afternoon.