A sharp fall in Russia's currency could cause inflation in the country to surge and strain its financial system.
The ruble fell about 30% against the dollar Monday — making it worth less than 1 U.S. cent — after the U.S., European Union and United Kingdom announced moves to block some Russian banks from the SWIFT international payment system and to restrict Russia's use of its massive foreign currency reserves. The system is used to move billions of dollars around more than 11,000 banks and other financial institutions around the world.
A weaker ruble could cause inflation to surge, potentially angering Russians whose budgets will be stretched by soaring prices. It will also add to strains across Russia's financial system. A rapidly depreciating ruble could also slam Russian companies that need to issue debt to raise capital.
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