August 28, 2014
Russian markets plunge as Putin tightens Crimea grip
Russia paid a heavy financial price for its military intervention in neighbouring Ukraine, with stocks, bonds and the rouble plunging as President Vladimir Putin's forces tightened their grip on the Russian-speaking Crimea region.
The Moscow stock market fell 11.3 percent, wiping nearly $60 billion off the value of Russian companies - more than the $51 billion Russia spent on the Winter Olympics in Sochi last month.
The central bank spent as much as $12 billion of its reserves to prop up the rouble as investors took fright at tensions with the West over the former Soviet republic.
The Russian central bank raised its key lending rate by 1.5 percentage points after the rouble fell to all-time lows, closing 2 percent down at 36.50 to the dollar and 1.6 percent lower at 50.38 against the euro.
The MICEX index of Russian shares tumbled 10.8 percent to close at 1,288.8 points and the dollar-denominated RTS collapsed 12 percent to 1,115.1 points.
Russian gas monopoly Gazprom, which supplies Europe through Ukraine, was down nearly 14 percent.
The east-west tension also knocked 2-3 percent off European stock markets and one percent off Wall Street, and sent safe haven gold to a four-month high.