Value of Ukraine's currency falls to record low

With political turmoil hammering Ukraine's economy, the country's currency tumbled four percent yesterday, with ripples spreading to Russia where the ruble fell to five-year lows and bank shares took a hit.

Ukraine's central bank, which has been rapidly burning its hard currency reserves to protect the hryvnia, said it has abandoned a managed exchange rate policy in favor of a flexible currency, a senior official told CNBC TV. The Russian ruble fell to a new record low against the euro yesterday amid fears of a Ukrainian default and a slowdown in the Russian economy.

The euro surged to 49.42 rubles, with the ruble dropping below the record set last week of 49.35 rubles. The dollar has risen to 35.94 rubles, its highest rate since 2009.