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Russian ruble slumps to over 14-month low vs dollar

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BM.GE
13.06.23 15:26
417
The ruble slid to its weakest in more than 14 months against the dollar on Tuesday as Russian markets reopened after a long weekend, hurt by lower oil prices and limited foreign currency supply from exporters.

By 0805 GMT, the ruble was 1.2 percent weaker against the dollar at 83.60, its weakest since early April 2022.

It had lost 1.5 percent to trade at 90.26 versus the euro, crossing the 90 threshold for the first time in nearly seven weeks, and had shed 0.9 percent against the yuan to 11.67 .

The market has seen reduced turnover and become susceptible to sharp swings since Moscow was targeted with sweeping Western sanctions over its invasion of Ukraine, with fewer foreign investors able to access Russian markets.

“There is illiquidity in the market,” said a trader at a large Russian bank.

Everyone was waiting for the ruble to strengthen again once exporters, for whom a weak ruble is beneficial, begin to convert foreign exchange revenues to pay local taxes later in the month, the trader added.

“The ruble is very worrisome,” said Alexei Antonov of Alor Broker, predicting that it could head towards 90 against the dollar.

“There is slight hope that exporters will take advantage of the favorable exchange rate for them and increase their sales of foreign currency revenues,” Antonov added.

Brent crude oil, a global benchmark for Russia’s main export, was up 1.8 percent at $72.42 a barrel. Prices for Brent have fallen sharply from near $78 in the last few sessions.

The ruble showed limited reaction to the central bank holding interest rates at 7.5 percent on Friday, but issuing its strongest signal yet that it may hike interest rates this year, saying that likelihood had grown as inflationary pressures intensify.

Russian stock indexes were mixed. The ruble-based MOEX Russian index was 1.1 percent higher at 2,738.3 points, supported by large issuers’ dividend payments.

The dollar-denominated RTS index was down 0.1 percent to 1,031.1 points.

Moscow-listed shares in Yandex fell 0.3 percent after VTB CEO Andrei Kostin told Reuters the state-owned lender may pull out of the running to acquire a stake in Yandex’s Russian business. VTB shares were 1.1 percent higher, Reuters reports.