As NATO countries increasingly impose sanctions on Russia for its continued invasion of Ukraine, the Russian economy is beginning to feel the blow. The Russian currency, the ruble, has been on a downtrend for a few days, and it hit a record today.

The ruble broke through the cent mark against the US dollar in the last 2 days, and today it fell below 115 again. This means that the Russian ruble is worth less than one US cent today.

Before Russian President Vladimir Putin launched the invasion of Ukraine, the ruble hovered around 70 for the past two years. However, it started to rise sharply in the last week of February. Every day since the beginning of the Russian invasion of Ukraine, the ruble has fallen daily against the dollar and the euro.

The Russian financial sector is in crisis following its invasion of Ukraine, as it is a financial blockade by major nations and financial institutions. The United States and the European Union have blocked Russia to use its emergency reserves to protect its economy. Coordinated action by the United States and the EU prevented the Russian central bank from selling its reserves in dollars, euros and other major foreign currencies.

US officials have said they intend to trigger more inflation in Russia to weaken the country’s monetary defense.

Not just the macro economy, Russian citizens are having to pay the price for their government’s actions as their cashless payment solutions have stopped working as global payments majors including Visa, Mastercard and Amex have blocked Russian financial institutions in their network, in accordance with US government orders imposing sanctions on Russia.

As measures to deal with the crisis, Russia proceeded to raise interest rates to 20%. The government has also asked companies to convert 80% of revenue into foreign currency domestically, as the central bank is unable to use its foreign currency reserves due to sanctions.