Investing.com - The Russian ruble fell to fresh record lows against the dollar on Monday falling below the 59 level for the first time and Russian equities dropped, as the prospect of fresh U.S. sanctions over the crisis in Ukraine spooked investors.
USD/RUB advanced 3.00% to 59.97, up from 58.21 late Friday.
The drop in the ruble came after the U.S. Congress on Friday approved tougher sanctions on Moscow and authorized the supply of military aid to Ukraine.
U.S. President Barack Obama has not yet signed the bill into law and has said it would be "counterproductive" for Washington to "get out ahead of Europe further" on sanctions.
The ruble found some support from a rebound in oil prices after they dropped to five-and-a-half year lows earlier in the session.
Brent crude was up more than 1% at $62.83 a barrel in afternoon trading in Moscow. Oil is one of Russia’s main exports.
Russia's central bank said on Monday it had conducted $478 million worth of foreign exchange market interventions on December 11, bringing the total amount of reserves spent propping up the currency this month to nearly $6 billion.
The central bank hiked interest rates by 1% last Thursday in a bid to defend the currency and stem spiraling inflation, to little effect.
The bank warned that inflation could exceed 10% in the first quarter of 2015 and also cut its growth forecasts for 2015 and 2016 to almost zero. It said it would continue to raise interest rates to curb rising inflation.
A combination of lower oil prices and western sanctions have weakened the ruble, caused a spike in inflation and almost completely shut Russian companies out of the global financial markets.
Elsewhere, the ruble hit record lows against the euro, with EUR/RUB up 3.58% to 75.13.
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