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Russian ruble reaches its lowest since November 2020

Russian ruble

Moscow, (Business News Report)|| The Russian ruble has fallen to its lowest level since November 2020, after Russian President Vladimir Putin recognized two breakaway republics in eastern Ukraine.

Putin ordered sending Russian troops to the two republics, bringing the Russian ruble to its lowest level in 15 months.

The Russian ruble fell by 1% to 80.5825 rubles against the dollar.

Shares of publicly traded United Co. RUSAL International, a Russia-based aluminum producer, fell as much as 22% in Hong Kong, the biggest loss since April 2018.

The yield on Russian dollar-denominated bonds due in 2047 rose 26 basis points to 5.38% on Monday.

Meanwhile, Rajeev de Mello, Global Macro Portfolio Manager at GAMA Asset Management in Singapore, said: “The extent of Russian pressure is still uncertain despite the recognition of the separatist regions. A more concerning view is that the 2 separatist regions claim the entire regions of Donetsk and Luhansk and send troops backed by Russia into the rest of the provinces.”

The Russian ruble and the dollar-denominated RTS Russian stock index were the worst performers globally on Monday. Panicked traders awaited the US and European response to Putin’s announcement to recognize the independence of the Donetsk and Lugansk peoples’ republics from Ukraine.

Oil prices

In a related context, oil prices rose to their highest level in 7 years, in light of the flare-up of geopolitical tensions in Eastern Europe.

Oil prices rose more than two dollars. Record rise in prices came after Russia ordered the deployment of its forces in the two separatist regions, in an escalation of a crisis that Western leaders have warned could spark a war.

The United States is expected to impose broad sanctions on Russia, at a time when American and European officials believe that the Russian move does not constitute an invasion yet.

Brent crude futures, the global benchmark, rose $2.10, or 2.2%, to $97.49 a barrel, after increasing by 2% yesterday.

Contracts rose earlier on Tuesday to $97.66, the highest level since September 2014.

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