MOSCOW, March 3 (UPI) -- Russian markets fell sharply Monday, dropping 9 percent in early trading, and the ruble reached all-time lows against the dollar and the euro.
Russian markets seem to be reacting adversely to a possible deployment of troops in Ukraine and financial sanctions, which are being considered by the U.S. and certain European nations. Russia's central bank unexpectedly raised its key lending rate on Monday to 7 percent from 5.5 percent. This increase was accompanied by other increases in other major lending rates.
The ruble fell 2.5 percentto 36.5 rubles against the dollar and 1.5 percent against the euro to 50.30. Russia's central bank has sold up to $10 billion in reserves to support the ruble. The Russian Central Bank said last month said that as of last month the country had $493.4 billion in foreign reserves.
But capital outflows totaled $35 billion in the first quarter, more than half the $63 billion outflows in all of 2013. Russia's central bank is having to rein in inflation and control the falling currency, while doubts are cast over the Ukraine crisis.