The USD-denominated stablecoin Tether (USDT) is up more than 30% in five days against the Russian ruble, highlighting the immediate and negative impact of the ongoing war on the traditional financial system.
Data from Cointelegraph Markets Pro and cryptocurrency exchange Binance shows that the ruble is experiencing inflation as the USDT/RUB trading pair crossed the 105 ruble mark for the first time in history.
USDT/RUB price dynamics. Source: Trading View
Prior to the sharp rise, the USDT/RUB pair maintained a relatively stable market price below 80 rubles. However, the market price of the ruble rose against USDT on Thursday, exceeding 90 rubles at the moment.
Amid rising tensions, the European Commission on Sunday announced plans to remove Russian banks from the Society for Worldwide Interbank Financial Telecommunications, or SWIFT, messaging system.
In parallel with this schedule, the ruble experienced a weakening and continued to lose purchasing power by 30% – it was eroded by inflation.
As an immediate countermeasure against rising fiat currency inflation, the Russian central bank doubled its key interest rates on Monday, from 9.5% to 20%. According to the central bank:
– An increase in the key interest rate will ensure the growth of deposit rates to the level necessary to compensate for increased consumption and the risk of inflation. This is necessary to maintain financial stability and price stability, to protect citizens’ savings from consumption. ”
In addition, the government has also required Russian companies to sell 80% of their foreign exchange earnings as threats of a complete international financial embargo prevail.