Rouble hits multi-month low vs dollar; Russian stocks slide

MOSCOW, Jan 24 (Reuters) – The rouble hit a more than nine-month low against the dollar on Monday while Russian stocks tumbled further against the backdrop of a stand-off between Moscow and the West over Ukraine.

Volatility has plagued Russian assets in recent weeks. Western powers fear that Russia is poised to invade its neighbour, which Moscow has repeatedly denied planning. The U.S. on Sunday said it was ordering diplomats’ family members to leave Ukraine. read more

By 0832 GMT the rouble was 0.3% weaker against the dollar at 77.67 , having earlier slipped to 77.8225, its weakest since April 7. Against the euro, it lost 0.2% to 88.01 .

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Stocks were falling sharply. Russia’s dollar-denominated RTS index (.IRTS) was down 2.9% at 1,360.7 points. The rouble-based MOEX Russian index (.IMOEX) was 2.4% down at 3,356.9 points.

“For the local market, expect risk-off to continue, with tensions smouldering and little opportunity to save face on either side – future events are up for debate, uncertainty will rule for now,” BCS Global Markets said in a note.

Russia’s 10-year OFZ bond yields hit 9.50%, near their highest since early 2016, before dropping to 9.41%. Yields move inversely to prices.

OFZ yields could rise further, Promsvyazbank analysts said, with investors expecting Russia’s central bank to raise its key rate again on Feb. 11 and with edgy markets even pricing in a small chance that the U.S. Federal Reserve raises rates this week to combat inflation.

Some pressure on Russian assets was eased on Sunday as Washington rebuffed calls for economic sanctions to be imposed on Moscow immediately, a step Western powers have threatened if Russia engages in hostilities against Ukraine. read more

Russian officials say the country’s finances are healthy and economic fundamentals are strong. read more

Russia is also grappling with rising COVID-19 cases, which hit a record high of 63,205 on Sunday, with the Omicron variant spreading across the country.

Brent crude oil , a global benchmark for Russia’s main export, was up 0.7% at $88.46 a barrel.

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For Russian treasury bonds see

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Reporting by Alexander Marrow
Editing by David Goodman

Our Standards: The Thomson Reuters Trust Principles.

source: reuters.com