USDT hits new all-time high against Russian ruble as inflation hits

US dollar-pegged stablecoin Tether (USDT) witnessed a rise of more than 30% in five days against the Russian ruble, highlighting the negative and immediate impact of the ongoing war on the traditional financial system.

Data from Coin-Crypto Markets Pro and crypto exchange Binance shows that the ruble (RUB) is undergoing inflation as the USDT/RUB trading pair crossed 105 RUB for the first time in history.

USDT/RUB price performance. Source: TradingView

Prior to the peak, the USDT/RUB pair maintained a relatively stable market price below 80 rubles. However, with the onset of the war between Russia and Ukraine, the ruble’s market price against USDT rose on February 24, reaching above 90 rubles.

As tensions escalated, the European Commission announced plans on February 27 to remove Russian banks from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) messaging system.

Parallel to this timeline, the ruble’s value fell and continued to lose its purchasing power by 30% – eaten away by inflation.

As an immediate countermeasure to the rising inflation of its fiat currency, the Russian central bank doubled key interest rates on February 28, from 9.5% to 20%. According to the central bank:

β€œThe hike in the key rate will push the deposit rate up to levels necessary to offset the increased risks of depreciation and inflation. This is necessary to support financial and price stability and protect citizens’ savings from depreciation.”

In addition, the government has also asked Russian companies to sell 80% of their earnings in foreign currencies, as threats of a complete international financial ban prevail.

Related: Bitcoin Exchange Volume in Ukraine Rises 200% as Russia’s War Causes Currency Problems

On the other hand, trading volumes of Bitcoin (BTC) and altcoin on Ukrainian crypto exchanges soared by more than 200% amid growing concerns about fiat stability.

As Coin-Crypto reported, major crypto exchange Kuna, whose volumes were below $1 million on Feb. 21, rose to nearly $4.1 million in three days. The National Bank of Ukraine has also introduced money restrictions, including withdrawal limits, and has completely banned cross-border purchases and withdrawals of foreign currency.

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