Sanctions Risk Sends Russian Ruble to Weakest in More Than Year

• April 10 2018
• Natasha Doff

Russia’s currency extended its plunge, dropping to the weakest level since Dec. 2016, as investors weighed the implications of the toughest U.S. sanctions yet.

Russia’s currency extended its plunge, dropping to the weakest level since Dec. 2016, as investors weighed the implications of the toughest U.S. sanctions yet.

The ruble dropped 2.1 percent to 61.98 versus the dollar, taking its slump this week to 6.1 percent. Russia’s benchmark stock index fluctuated between gains and losses after its sharpest collapse on Monday since since Russia annexed Crimea in 2014.

The sanctions which blacklisted billionaire Oleg Deripaska’s United Co. Rusal and En+ Group Plc raised the stakes in Russia’s standoff with the U.S. as panic spread through the market about what could be targeted next. Escalating tensions between Russia and the U.S. over the conflict in Syria are also giving traders cause for concern.

“The major risks to the Russian currency come from geopolitics,” Vladimir Miklashevsky, a senior economist at Danske Bank A/S in Helsinki, said in a research note. “If the situation does not get worse, we would see potential in buying. However, the current setup is too murky, especially on a possible escalation in Syria between Russia and the U.S.”