Economic 'DISASTER' for Putin: Ex-Russian PM Mikhail Kasyanov says 'devastating' Western sanctions means rouble 'cannot be supported' as currency hits record LOW... and Germany's plan to stop buying gas will cut off final source of foreign exchange

 

Customers wait in queue to withdraw money at an ATM in Moscow last night. Russian authorities introduced some temporary economic measures to ensure the country's financial stability

By MARTIN ROBINSON, CHIEF REPORTER

• Mikhail Kasyanov, who served Putin between 2000 and 2004, says sanctions have been a 'catastrophe' 
• Rouble crashed again against the dollar and pound as the economy creaks after a barrage of sanctions
• Sberbank announced huge profits but its European arm has seen run on bank and 'abnormal cash outflows' 
• It has lost 97% of its value on the London Stock Exchange in the past fortnight with shares largely worthless
• Cryptocurrency exchanges won't 'unilaterally' freeze accounts of all Russians, saying they aren't fullproof 
  
  Citizens wait in front of the entrance of a branch of the Russian Sbertbank in the center of Zagreb, Croatia, as people try to get their cash out. The lender will shut its European arm as cash flooded out
• The bank has lost 97% of its value on its London listing in the past fortnight and has told shareholders that significant 'cash outflows' have damaged the business outside Russia.
• Vladimir Putin's first prime minister today declared Russia's rouble now cannot be supported as the currency careered towards junk status with citizens still rushing to pull their cash from ATMs and the country's biggest bank shut down its European arm.

  Mikhail Kasyanov, who served Putin between 2000 and 2004, has said that the economic damage inflicted by the West on Russia since the invasion of Ukraine has already been 'catastrophic'.

• Russia's currency has plunged even further against the pound and dollar today as its biggest lender Sberbank shut down its European arm after 'abnormal' amounts of money started pouring out when war broke out. 

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  A currency exchange information board in Moscow yesterday as the rouble collapsed in value

• It came as it was revealed the West is still paying Russia more than $1billion-a-day for oil and gas that Putin can use to subsidise his $15billion-a-day invasion of Ukraine as his troops remain bogged down after hitting fierce resistance from Volodymyr Zelensky's heroes.   

  Shell has said it will ditch its work with Gazprom and pull out of the controversial Nord Stream 2 pipeline as Western powers reel from President Putin's warmongering in Eastern Europe. Shell is said to have offered £600m of finance for the project.

  Shell warned that it could take a £2.2billion hit as it laid out a plan to exit a series of projects. These include its 27.5pc stake in Sakhalin 2 – a flagship facility in the Russian Far East that is majority-owned by Gazprom and produces around 4pc of the world's liquefied natural gas. 

  But it did not announce who they would sell their stakes to. It isn't quitting Russia altogether, however. It has a network of around 400 petrol stations and a lubricants business in the country which it said it intends to keep. 

  Shell's announcement came a day after BP said that it was cutting ties with Kremlin-backed oil company Rosneft, valued at around £13billion last year. BP is now looking to offload its 19.75pc stake in Rosneft and current boss Bernard Looney has stepped down from the board.

  But Putin's grip on the world's oil and gas taps means that Europe and the US are still buying almost $1billion-a-day from Russia. The UK also imports smaller amounts from Russia.

  However, despite the huge daily cash injection from the West, the Kremlin is facing unprecedented liquidity problems. Its central bank, which raised interest rates to 20% yesterday, is expected to turn to its ally China to try to sell off Chinese assets worth up to $77billion back to Beijing. Britain, the EU and the US will be watching to see just how far President Xi is willing to support Putin and his war.

  In a sign the Russian people are paying the price for Vladimir Putin's invasion of Ukraine, the country's currency dropped 30 per cent against the US dollar. It has stabilised this morning after hitting rock bottom yesterday.

  And after days of turmoil on financial markets, regulators in Russia refused to open the Moscow stock exchange, while long queues formed outside banks as panicked families tried to withdraw cash.

  A Moscovite called Anton said: 'There are no dollars, no roubles - nothing. Well, there are roubles but I am not interested in them. I don't know what to do next. I am afraid we are turning into North Korea or Iran right now'.

  One designer called Andrey told the BBC that rising interests rates mean he can't pay his mortgage. He said: 'If I could leave Russia right now, I would. But I can't quit my job'.

  'I am planning to find new customers abroad asap and move out of Russia with the money I was saving for the first instalment. I am scared here - people have been arrested for speaking against 'the party line'. I feel ashamed and I didn't even vote for those in power.'

• Mr Kasyanov said the rouble 'cannot be supported' any longer amid misery for the country's 145million citizens, whose savings and investments are being battered. He added: 'They will turn on the printing press. Hyperinflation and catastrophe for the economy is not far away'. 

  But the rising cost of oil and gas is good news for Putin as it was revealed the West is still paying Russia more than $1billion-a-day for fossil fuels, an amount that is only going to rise when Europe is so reliant on their supplies.

  However, Germany, the Kremlin's best customer, has declared that it is ready to stop buying gas, relying on what it has in storage and ramping up output from its coal and nuclear power plants in the short term.

  Mr Kasyanov says this would be another 'disaster' for Russia. 

  In a landmark speech on Sunday, German Chancellor Olaf Scholz spelled out a more radical path to ensure Germany will be able to meet rising energy supply and diversify away from Russian gas, which accounts for half of Germany's energy needs.

  'The events of the past few days have shown us that responsible, forward-looking energy policy is decisive not only for our economy and the environment. It is also decisive for our security,' Scholz told lawmakers in a special Bundestag session called to address the Ukraine crisis.

  Sberbank has lost 97% of its value on its London listing in the past fortnight and has told shareholders that significant 'cash outflows' have damaged the business outside Russia. On February 16 it was $15 a share but today it is worth 1.5 cents.

  Its bosses in Moscow said its subsidiaries in Europe were also facing an 'a threat to the safety of employees and branches', according to Russian news agencies. 

  Last night the rouble plunged to a record low against the dollar - before rallying slightly this morning before dropping again as sanctions batter the economy. It was down around 3.5% on the day versus the dollar today, at 108.6, having weakened to a record low of 117 per dollar yesterday evening. 

  The Russian stock exchange will not open for the third day running today as Russia's central bank was forced to sharply hike its key interest rate in a desperate attempt to shore up the plummeting currency market - now at record low levels against the pound and dollar - and prevent the run of banks after being hit by a slew of crippling Western sanctions.  

  

  
  

• Former Russian Prime Minister Mikhail Kasyanov said the rouble 'cannot be supported' after the sanctions on Putin's Russia