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The Russian rouble has crashed almost 30% to a new record low against the dollar, oil prices have jumped as much as $7 a barrel and gold prices have gained 1%, as financial markets opened for trading for the first time since western nations announced wider economic sanctions on Russia for its invasion of Ukraine.
The exclusion of major Russian banks accounting for 70% of the Russian banking market from the SWIFT system to make payments and the possibly even more far-reaching attempt to limit the use of Russia’s foreign exchange reserves of some $630bn can cause problems for financial and non-financial companies outside Russia. The precise impact is difficult to predict in advance. But we would expect central banks, regulators and finance ministers to see to it that the measures will not cause a major financial accident in the advanced world beyond temporary frictions.
