US dollar stablecoin Tether (USDT) has recorded a spike of over 30 percent in the past five days against the Russian ruble, thus highlighting the immediate aftermath of the ongoing Russian invasion of Ukraine on the traditional financial system.
Data collected from Cointelegraph Markets Pro and crypto exchange Binance has projected that the ruble (RUB) has been undergoing inflation as the USDT/RUB trading pair has crossed 105 RUB for the first time in history.
Before the spike had been witnessed, the USDT/RUB pair had maintained a comparatively steady market price just below 80 rubles. However, as the Russia-Ukraine conflict commenced, the ruble’s market price against USDT noticed a surge on February 24, momentarily exceeding 90 rubles.
As tensions were escalating, on February 27, the European Commission had announced plans of eliminating several Russian banks from its Society for Worldwide Interbank Financial Telecommunication (SWIFT) messaging system.
Parallel to the same timeline, the value of the ruble had registered a decline, and it continued to lose its spending power by 30 percent, which was eaten away by inflation.
As an immediate counter against the rising inflation of the country’s fiat currency, the Russian central bank has doubled key interest rates on February 28, from 9.5 percent to 20 percent.
According to the central bank, this move of increasing the key rate is aimed at ensuring a rise in deposit rates to levels that are needed for compensating for the increased depreciation and inflation risks. The measure is needed for supporting financial and price stability and protecting citizens’ savings from depreciation, the bank opines.
In addition, the government has asked Russian firms to sell 80 percent of their foreign currency revenues amid threats of a complete international financial ban are looming.
On the flip side, though, Bitcoin and altcoin trading volumes on the Ukrainian crypto exchanges have spiked over 200 percent as growing concerns about its fiat stability prevail.
One of the most prominent cryptocurrency exchanges, Kuna, whose volumes had been under $1 million on February 21, witnessed a spike of almost $4.1 million in just three days. The National Bank of Ukraine has reportedly implemented cash restrictions, including the imposition of withdrawal limits in addition to banning cross-border foreign currency purchases and withdrawals outright.