Russian Ruble Falls 3% Against Dollar Due To Sanctions

On Tuesday, there was a 3% drop in the Russian ruble against the US dollar, as the currency was unable to consolidate a recovery from the decline it had recorded in the previous week.

This was because the Russian market was coming to terms with the possibility of a decline in export revenue for the country, given that restrictions have now been imposed on Russian oil.

Ruble’s performance

Last week, the Russian ruble had been on a downfall against the US dollar, as it lost about 8% of its value and is now on track for a rather major decline in a month after a price cap as well as an oil embargo was put into effect.

However, according to the Russian finance ministry, the recent slump had occurred because the country’s imports had begun to make a recovery, which had declined amidst the war with Ukraine.

The ruble had already lost 3% against the greenback by 1519 GMT to reach 71.36 and it was on course to reach the eighth-month low that it had struck last week at 72.6325.

Market analysts said that it was likely that the ruble would continue to show extreme volatility because there has been a change in trade flows and sanctions pressure has also gone up.

Therefore, the market would have to find a new equilibrium point and until that happens, the Russian national fiat is going to be in flux.

The fluctuations

Predictions indicate that the Russian ruble will continue to fluctuate against the US dollar this week between the ranges of 68 and 71.

There was a 3.4% drop in the ruble against the euro, as it fell to 76.03. It has also lost 3.3% against the Chinese yuan to reach 10.09.

This year, the ruble has managed to perform quite well against the dollar. As a matter of fact, it has had one of its best years because of the capital controls imposed by the government and the decline in imports due to the Ukraine war.

More details

On Tuesday, Andrei Belousov, the First Deputy Prime Minister of the country, said that a weaker ruble would be a good thing now because there is a decline in revenue and exports.

He said that a stronger ruble had already played its role and in the current market conditions, it would help them to have a weaker ruble that would be around 70 to 80 per dollar.

There was a 1% rise in Brent crude oil to reach a price of $84.8 per barrel, which is the main Russian export.

As far as stock indexes in Russia are concerned, their performance came off as a bit mixed. There was a 2.9% drop in the RTS index, which is denominated in the US dollar, at it reached 948.8 points.

The MOEX Russian index, which is denominated in the ruble, climbed 0.5% to reach 2,148.8 points after it had managed to reach its highest value in almost two weeks.