Russian Rouble Drops 8.5% As Dollar Rises Post-Kursk Attack

On Tuesday, the Russian rouble continued its downward trend for the sixth consecutive trading session, following Ukraine’s unexpected attack on Russia’s Kursk region a week ago.

By 0800 GMT, the rouble had weakened by 1.6% to 92.50 against the dollar, according to LSEG data. Since the attack began on August 6, the rouble has depreciated by 8.5%.

Trading in major currencies has moved to the over-the-counter market, making pricing data less transparent, following Western sanctions imposed on the Moscow Exchange and its clearing agent, the National Clearing Centre, on June 12.

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One-day rouble-dollar futures, which reflect OTC market rates, fell by 0.4% on Tuesday to 89.60. On the previous day, these futures had dropped by 2.5%.

The central bank’s official exchange rate, based on OTC data, was set at 89.93 on Monday, marking a 6% decline since the start of the attack. Despite support from rising oil prices and increased net daily yuan sales by the central bank and finance ministry, the rouble’s decline against the dollar and euro has persisted.

In the OTC market, the rouble weakened by 0.6% to 12.00 against the Chinese yuan, reaching this level for the first time since July 22. It also fell by 2.4% to 101.90 against the euro, breaking below the key level of 100 roubles per euro for the first time since February 23, according to LSEG data. The central bank’s official rate was 96.69 roubles per euro.

Brent crude oil, a key export for Russia, was down 0.2% to $81.88 per barrel, driven by concerns over demand following OPEC’s revised forecast for demand growth in 2024.

(Includes inputs from online sources)

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