The Russian rouble has fallen to a new all-time low on the back of the ongoing conflict between the country and Ukraine.
After Ukrainian protesters took to the streets of Kiev to force out leader Viktor Yanukovych and call for the nation to lobby to join the European Union, Arseniy Petrovych Yatsenyuk took over as the nation's prime minister.
But Russian military forces have moved into the Crimea region of Ukraine in a move the new interim leader has described as a "declaration of war". Protesters had been unhappy with the level of influence the Russian regime, led by president Vladimir Putin, has in Ukraine.
The rouble fell 2.5 per cent to 36.5 roubles against the dollar after violence escalated in the eastern European country, as well as slipping by 1.5 per cent against the euro to 50.30.
This also had a knock-on impact on Moscow's MICEX main stock index, which also fell, dropping by nine per cent in early trading. Russia's central bank also took action as it announced that its key lending rate was to be raised to seven per cent from 5.5 per cent.
"The decision is directed at preventing risks to inflation and financial stability associated with the increased level of volatility in the financial markets," the central bank said in a statement.
Russian military forces have already been mobilised in Ukraine and this move is expected to hurt the rouble and the region's main stock markets even further in the coming days.
"Now that (Russia and Ukraine) are actually on the verge of a military confrontation investors will start selling Russian stocks with special fervour," analysts at Rossiysky Capital told investors.
Artem Argetkin, a trader at BCS in Moscow, told BBC News: "There's a sell-off of everything right now." He added that brokers are currently trying to close their positions at any price they can get.
Russia has also been hit by the fast rising demand for US dollars, with an employee at a small exchange admitting it had run out of the greenback.
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