Monday, June 24, 2024

Russia’s rouble falls to more than 16-month low against dollar

The Russian rouble has tumbled over 2 percent to a more than 16-month low past 94 against the dollar, pressured by political risk, falling oil prices and concerns the finance ministry may switch to foreign currency purchases this month.

The rouble was 2% weaker against the dollar at 94.16 , earlier hitting 94.32, its weakest point since March 28, 2022.

It had lost 1.8% to trade at 103.00 versus the euro , also a more than 16-month low, and had shed 1.8% against the yuan to 13.07.

Brent crude oil , a global benchmark for Russia’s main export, was down 2.2% at $83.03 a barrel, sliding back from its strongest since April 17 of $85.99.

A high-rise building in Moscow’s business district that houses three Russian government ministries was struck by a drone for the second time in three days on Tuesday, forcing companies to think about their employees’ safety.

The rouble was also hurt by market uncertainty over whether the finance ministry will this month continue with foreign currency sales to cover shortfalls in Russia’s energy export revenues, or switch to purchases.

Analysts surveyed by Reuters gave no clear consensus. The ministry will inform the market of its monthly interventions plan on Thursday.

“The rise in oil prices, coupled with the weakened rouble, reminds us of prospects for the start of yuan purchases under the budget rule,” said Bank St Petersburg analysts.

Russia resumed foreign currency interventions in January, selling China’s yuan rather than what it terms “unfriendly” Western currencies.

Russian stock indexes were mixed.

The dollar-denominated RTS index (.IRTS) was down 1.5% at 1,040.2 points. The rouble-based MOEX Russian index (.IMOEX), which in the previous session hit its strongest mark since before Russia’s February 2022 invasion of Ukraine, was 0.4% higher at 3,106.5 points.

The MOEX is abnormally high, stated Sinara Investment Bank in a note. The index still remains well below the record highs above 4,000 points hit in late 2021, stung by geopolitics.

“Retail investors’ euphoria may continue today both on the back of dividend reinvestment and the weakening rouble. However long-term growth perspectives are in doubt due to growing risks,” Sinara added.

› Subscribe

LEAVE A REPLY

Please enter your comment!
Please enter your name here

The reCAPTCHA verification period has expired. Please reload the page.

More Articles