The ruble has taken a big hit as political tensions escalate over the fate of Ukraine and the Russian economy falters.
The currency has fallen by 1.4% versus the U.S. dollar over the past week, bringing its decline for the year to 10%. The dollar now buys 36.10 rubles, a level not seen since 2009.
oreign exchange traders have reacted, in part, to rising regional tension since Ukrainian protestors forced pro-Moscow President Viktor Yanukovych from office.
“Any political volatility or military stand off in the region will send negative signals to [people] who have investments in those countries,” said Lilit Gevorgyan, a senior economist at IHS Global Insight.
“If Russia ventures into military action in Ukraine, this will have a serious impact on the performance of the Russian currency,” she said.
Russia has strategic interests in its neighbor Ukraine, a country that is divided between pro-European regions in the west and a more Russia-oriented east.
Ukraine is a key route for Russian gas exports to Europe and has a large Russian-speaking population. It’s also home to a Russian naval fleet, based in the city of Sevastopol in the Crimean region.