Rouble slumps past 70 vs dollar for first time since May

Rouble slumps past 70 vs dollar for first time since May
Rouble slumps past 70 vs dollar for first time since May
© Reuters. FILE PHOTO: Woman holds Russian Rouble banknotes in this illustration taken May 30, 2022. REUTERS/Dado Ruvic/Illustration

By Alexander Marrow

MOSCOW (Reuters) -The rouble plunged to its weakest level since early May past 70 against the dollar on Wednesday, extending weekly losses with fears over sanctions on Russian oil and gas spooking the market.

By 0713 GMT, the rouble was down 2.1% against the dollar at 70.31, after hitting 70.6775 earlier.

It had lost 1.7% to trade at 74.76 versus the euro, earlier crossing the 75 threshold for the first time since late April. It had shed 1.7% against the yuan to 10.06, a near seven-month low.

The rouble has already lost more than 7% this week against the greenback and around 11.5% since a cap on Russian oil prices came into force, but remains the world’s best-performing currency this year, supported by capital controls and an initial collapse in imports as a result of Western sanctions over Russia’s actions in Ukraine.

The rouble has been catching up with the weakening of Russia’s balance of payments, said Rachel Ziemba, founder of Ziemba Insights. “In recent months, Russian export revenues have fallen as it sharply reduced gas exports and the EU oil embargo is limiting oil revenues.”

“Meanwhile imports have revived, meaning that instead of a gigantic import contraction-led balance of payments surplus it is coming closer to deficit,” Ziemba added.

Russian oil exports fell by 11% for Dec. 1-20 compared to the previous month, after the European Union’s embargo on Russian oil came into force, the Kommersant daily reported on Wednesday, citing unidentified sources familiar with the situation.

, a global benchmark for Russia’s main export, was up 0.1% at $80.1 a barrel.

Russia’s finance ministry is due to tap local debt markets once more on Wednesday, issuing three OFZ bonds as Moscow borrows heavily to help finance its military campaign in Ukraine.

Russian stocks were mixed. BCS World of Investments said the rouble continuing to plunge would likely also see the RTS index fall.

The dollar-denominated RTS index was down 1.3% to 654.6 points, flirting with more than two-month lows. The rouble-based MOEX Russian index was 0.5% higher at 2,130.6 points, rebounding from a near eight-week low hit in the previous session.

For Russian equities guide see

For Russian treasury bonds see

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