Russia’s central bank in Moscow.

Gavriil Grigorov | TASS | Getty Images

Russia’s central bank has nearly doubled the country’s key interest rate from 9.5% to 20% as its currency, the ruble, hit a record low against the dollar on the back of a slew of new sanctions and penalties imposed on Russia by Europe and the U.S. for its invasion of Ukraine.

The rate hike, the central bank said, “is designed to offset increased risk of ruble depreciation and inflation.” This follows the central bank’s order to halt foreigners’ bids to sell Russian securities in an effort to contain the market fallout. The ruble fell as far as 119.50 per dollar, down a whopping 30% from Friday’s close.

The bank also said it would be freeing 733 billion rubles ($8.78 billion) in local bank reserves to boost liquidity.

Over the weekend, the U.S., European allies and Canada agreed to cut off key Russian banks from the interbank messaging system, SWIFT, which connects more than 11,000 banks and financial institutions in over 200 countries and territories. The EU also announced Sunday it was shutting its airspace to Russian aircraft.

The ramp-up in punitive measures against Russia — the strongest that the EU has ever deployed against it — come as Russian forces deployed by President Vladimir Putin carry out offensives all over Ukraine. It follows several days of heavy shelling and missile strikes in major urban centers including Ukraine’s two largest cities, its capital Kyiv and Kharkiv, which together have a population of nearly 5 million people.

Ukrainian forces have so far managed to hold back the Russian advances and remain in control of the two cities, Ukraine’s defense ministry said on Sunday.

This is a breaking news story, please check back later for more.

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