Ruble Loses Ground Against Dollar Following Sanctions on Russian Oil

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.