The Russian ruble is at a 14-month low against the dollar, widening its previous losses, while the Russian stock market is falling further in the context of Moscow’s confrontation with the West over Ukraine.
Instability has hit Russian assets in recent weeks. Western powers fear Russia is ready to invade its neighbor, something Moscow has repeatedly denied it plans.
If Russia invades, the West has threatened sanctions, with deep economic repercussions.
The ruble fell 0.9% against the dollar to 78.18, while earlier it had reached 78.32 rubles, which is the lowest level since November 2020.
Shares also fell sharply, with the Russian stock index (in dollars) RTS falling 6% to 1,317.2 points, and the MOEX (in rubles) falling 5%.
“For the local market, expect the risk to continue, with tensions simmering. Future developments are under discussion, and uncertainty will prevail for the time being,” said BCS Global Markets.
Geopolitical tensions have pushed the five-year CDS to its highest level since March 2020, and currency volatility has reached its highest level since November 2020.
“We note that we are currently approaching the levels of volatility of the ruble at which the central bank has in the past suspended foreign exchange markets based on fiscal rules,” Citi said in a report.