Russian rouble hits new low

Russia’s rouble has fallen to a fresh all-time low against both the dollar and the euro after the political turmoil in Ukraine intensified.

The rouble fell 2.5% to 36.5 roubles against the dollar and 1.5% against the euro to 50.30.

Stocks on Moscow’s MICEX main stock index also fell 9% in early trading.

The Russian Central Bank was reported to have sold up to $10bn (£6bn) of reserves to support the rouble, according to Reuters news agency.

The Russian Central Bank said last month that its international reserves totalled $493.4bn as of 21 February.

The sharp falls came as Russia’s central bank hiked its key lending rate on Monday to 7% from 5.5%.

“The decision is directed at preventing risks to inflation and financial stability associated with the increased level of volatility in the financial markets,” the central bank said in a statement.

Selling ‘fervour’
At the weekend, President Vladimir Putin received parliamentary approval to deploy Russian troops in Ukraine.

His spokesman said he had yet to decide whether he would send troops in.

“Now that (Russia and Ukraine) are actually on the verge of a military confrontation investors will start selling Russian stocks with special fervour,” analysts at Rossiysky Capital said in a note for investors.

BBC

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Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell