Ruble crashes nearly 10% to about $134 as Russia sanctions bite
The ruble weakened nearly 10 percent on Monday to about $134, pressured by the weight of Western sanctions imposed over Russia’s invasion of Ukraine and as Russia’s financial system faltered.
It dipped to a low of $138.5 on Monday, before rebounding slightly to $133.9975, still down nearly 10 percent.
The currency closed more than 10 percent against the dollar at 122 on Friday. And last week, the currency in offshore trading fell more than 32% for the week, the most for any week on records until 2007. Demand spread was the expanded last week in what traders called a sign of evaporating liquidity.
This week, the ruble in Moscow trade ended more than 20 percent against the dollar and the euro in Moscow trade as the country’s economy collapsed under the pressure of sanctions designed to isolate Russia in response to the invasion. from Ukraine.
“Russian assets are being destroyed in value,” Cristian Maggio, head of portfolio strategy at TD Securities, told Reuters.
Russia’s credit rating was thrown deeper into the trash by S&P Global, following similar moves by Moody’s and Fitch, as international sanctions increased the likelihood of default. Russian forces in Ukraine caused worldwide alarm when they seized Europe’s largest nuclear power plant and disrupted financial markets.
Dmitry Polevoy, investment director at Locko Invest, warned Reuters that the sanctions imposed on Russia over its invasion of Ukraine — which Moscow says is not intended to occupy territory — would lead to an economic shock of a magnitude that could not be expected in a long time. has not been seen. †
On Friday, the Russian central bank cut the commission on foreign exchange purchases by private individuals via brokers from 30 percent to 12 percent.
Analysts said an earlier move to raise the commission to 30 percent on purchases of currencies like the dollar, euro and pound sterling had led to disruptions, such as a surge in demand for other currencies like the Chinese yuan and Japanese yen. .
In an effort to stabilize highly volatile markets, the Moscow Exchange banned short-selling euro currencies and equity instruments.
Under an executive order signed by President Vladimir Putin on Saturday, Russian companies will be allowed to pay foreign creditors in rubles to avoid defaults.
The Russian stock market remained closed and bond trading showed wide bid-ask spreads and little to no volume.
But the currency has started the week in trouble. The plan by the US and its allies to ban oil imports from Russia will further weigh on the ruble.
