Ruble Loses Ground Against Dollar Following Sanctions on Russian Oil

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As the market adjusted to the possibility of weaker export revenues following sanctions on Russian oil, the ruble fell by almost 3% versus the dollar on Tuesday, failing to sustain a recovery from last week’s decline.

Following the implementation of an oil embargo and price cap, the ruble lost roughly 8% versus the dollar last week and is on track to have a significant monthly fall. The recent downturn, according to the finance ministry, was brought on by recovering imports.

The ruble was down 3% against the dollar at 71.36 earlier today, moving back toward the recent almost eight-month low of 72.63.

Projecting the course of the ruble, BCS World of Investments stated in a note: “At the end of December, the ruble is likely to remain extremely volatile as the market will need to find a new equilibrium under changed trade flows and increased sanctions pressure,” adding:

“This week, the ruble is expected to fluctuate in the range of 68 to 71 (per dollar).”

Meanwhile, the RUB decreased by 3.4% to 76.03 against the euro. It was down 3.3% against the yuan at 10.09.

Ruble Still Maintains Position as Best-Performing Currency

Due to capital controls and lower imports, the ruble has nearly maintained its position as the best-performing major currency overall this year when compared to the US dollar.

First Deputy Prime Minister Andrei Belousov stated on Tuesday that a lower currency is now more advantageous due to declining exports and income. Belousov said that “the strong ruble has played its role,” adding:

“In these conditions… it would be good to have a ruble rate of 70-80 per dollar.”

Russian export benchmark Brent crude oil rose 1% to $84.8 per barrel while Russian stock indexes remained neutral.

At 948.8 points, the dollar-denominated RTS index was down 2.9%. The MOEX Russian index, which is based on the currency, increased by 0.5% to 2,148.8 points after previously reaching a record high for almost two weeks.