With Western sanctions biting, and more most likely to come after the Skripal announcements in the U.K., and Russians protesting pension reform in the streets, the Russian ruble is falling rapidly on international markets, reaching its lowest point in two years.
The euro rate on the Moscow Exchange rose 0.36% against the closing level of the previous trading session and reached 81.09 rubles. The euro was above 81 rubles last time on March 1, 2016. The dollar added 0.27% and climbed to 70.10 rubles. The dollar was above the level of 70 rubles last time on March 16, 2016, wrote Russian state news agency TASS.
“The sell-off was fueled by concerns over the central bank’s independence. Last week, prime minister Dmitry Medvedev called for rate cuts. The next interest rate decision is Friday. “This interference in monetary policy came at the worst possible time and has weighed heavily on the rouble,” wrote Commerzbank analyst Ulrich Leuchtmann,” wrote Seeking Alpha.
With American sanctions on Iran starting to become a serious issue in Tehran, the billions in arms and energy contracts with Moscow now seem in doubt. The Kremlin is also spending money once again in Syria as the final offensive in Idlib has begun.