As a result of sanctions imposed by President Biden in conjunction with dozens of other countries, the rouble has plummeted, according to Reuters:
‘The rouble has lost nearly 50% of its value against the greenback since the start of the year, with losses sharply accelerating since Russia invaded Ukraine on Feb. 24, a move that sparked sweeping sanctions from various governments across the world.’
Monday morning the rouble “fell sharply in thin trading.” Putin closed the local markets until Wednesday as the earliest. And the rouble has been at a “record low.”
Senior Analyst at Swissquote Ipek Ozkardeskaya said, according to Reuters:
‘The future doesn’t look bright for the Russian rouble at all. The combination of western sanctions, the rising risk of default and the incentive to divest from rouble-denominated assets will likely further weigh on the currency.’
Head of Global EM Research at Oxford Economics Gabriel Sterne said:
‘With Russian prices on the euro bond somewhere around 20, this is going to go on for a long, long time, and nobody wants to be associated with (the rouble).’
Sterne continued said that all was left to do was “an orderly disposal of Russian assets:”
‘Just sell it and take a loss. You have to interpret the price movements as: there’s almost infinite supply and very little demand for these assets at the moment. It’s now just a matter of an orderly disposal of Russian assets.’
America’s sanctions on Russia, its banks, its corporations, and certain individuals appeared to work as intended:
‘The rouble bids were indicated as far as 150 to the dollar after closing at 121.037 on Friday, according to Refinitiv data . On the EBS trading platform, the rouble weakened as far as 160 to the dollar, or more than 22%, and was recently traded at 145, down 14.5% on the day.’
Russian companies that were traded in the U.S. stopped “after dropping nearly 80% year-to-date:”
‘Five-year credit default swaps in Russia – reflecting the cost to insure exposure to the country’s sovereign debt – soared to a record 2,757 basis points compared to 1,725 basis points on Friday, data from IHS Markit showed.’
Rouble-implied volatility gauges hit record highs last week:
‘The one-week gauge above 84% and the one-month one above 94%.’
Chris Weafer, Chief Executive at consultancy firm Micro-Advisory based in Moscow said, as the BBC reported:
‘You are beginning to see a little bit of queuing in some grocery stores, particularly people buying some goods that they think might come into short supply due to trade restrictions or maybe will be subject to big price increases because of the rouble devaluation.’
He continued:
‘This set of sanctions is hitting ordinary Russians to an extent that previous sanctions have not and people are now becoming aware of that.’
Changes in Russia’s financial picture appear to be occurring daily.
Three White Lions is Gloria Christie’s new serialized book available in episodes on Amazon. Go to Kindle Vella and insert her name. She also writes for the liberal online newspaper The Bipartisan Report. Gloria Christie Report her newsletter for people on the go. Written in her own unique style with a twist of humor in a briefer version of Bipartisan Report. Christie’s Mueller Report Adventures In Bite-Sizes a real-life compelling spy mystery. Find her here on Facebook.
