Rouble drops to 8-month low against the dollar

On Thursday, the Russian rouble plunged to an eight-month low against the dollar, straining under the pressure of expectations that sanctions on Russian gas and oil exports may restrict income from those sales.

The rouble's value versus the dollar had fallen to 72.83 by 07:17 GMT, its lowest level since April 27.

It dropped 0.6% against the euro to trade at 76.93 and 0.7% against the yuan to 10.31.

The month-end tax period, during which exporters often convert foreign currency income into roubles to fulfill domestic liabilities, has now lost its importance as a major underpinning for the rouble, and pressure has also been applied by rising imports and declining exports.

Alfa Capital noted in a note that "the fundamental factor in the form of the change in current account parameters, where exports have decreased and imports risen, is putting noticeable pressure on the rouble’s position."

Russia's primary export, Brent crude oil, which serves as a benchmark worldwide, was down 0.9% at $82.5 a barrel.

This week, President Vladimir Putin signed an order that forbids the delivery of crude oil and oil products beginning on February 1 for five months to countries that adhere to the Western oil price cap. This was Russia's long-awaited response to the cap.

Since the price cap went into effect on December 5, the rouble has now fallen by about 15% against the dollar.

In the months leading to 2023, Russia's economy is also in trouble. On Wednesday, economic data for November indicated that growth prospects were being harmed by a labor shortage related to Putin's late-September partial mobilisation order.

The Russian stock indexes were inconsistent.

The RTS index (.IRTS), which is denominated in dollars, fell 0.8% to 926.5 points. The MOEX Russian index (.IMOEX), which is based on the rouble, was 0.1% higher at 2,141.5 points.

By fLEXI tEAM