(London Telegraph) The simmering crisis in emerging markets has spread to Eastern Europe, forcing Russia and Romania to defend their currencies against capital flight and triggering a sharp rise in Hungary’s borrowing costs.
The Russian central bank vowed “unlimited” intervention to defend the rouble after it fell to a record low against a basket of currencies.
Moscow has already burned through $7bn of reserves since early January. Yields on Russia’s two-year “cross-currency swaps” – closely watched by traders for signs of a liquidity crunch – rocketed by 60 basis on Thursday to 7.6pc. They have risen by 140 points in the past three weeks.
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