It appears that things in Russia aren’t going exactly as planned for Vladimir Putin. Following the continued imposition of sanctions against the country, and the removal of several banks from the SWIFT standard, it appears that the Central Bank of Russia has effectively cut off its nose to spite its face, so to speak.
It was just announced by the Central Bank, and reported via Reuters, that as of 0400 GMT, foreign clients will no longer be able to sell Russian securities. The bank ordered market players to reject orders from such clients, as it looks to take aim at the West for recently imposed sanctions on its financial sector, particularly against the Bank itself.
The line of thinking here, at least in theory, appears to be that if foreign investors are unable to sell their Russian securities, they won’t be able to then exchange their Rubles for Dollars and get money out of the country – thereby helping to sustain a drastically falling currency. The trouble of course here, is that this will likely have a long standing impact on foreign investment within the country as a whole.
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The move follows a former top official of the Central Bank stating that there would be a “catastrophe on the Russian currency market on Monday,” following sanctions imposed over the weekend.
The move comes just twelve hours after the Central Bank stated that they will “provide uninterrupted Ruble liquidity,” and that they “have enough resources to support the stability of the Russian financial sector and secure its operations.” Despite the commentary, it’s being reported that bank runs are beginning within the country.
Information for this briefing was found via Reuters and the Central Bank of Russia. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
