- Russia’s ruble continued to sag against the dollar and the yuan, hitting its lowest level in a year.
- That drop comes ahead of a key US Treasury license expiring this month.
- The license expiring could jeopardize Russia’s access to the yuan, Reuters previously reported.
Russia’s ruble sank to its lowest level in a year against the US dollar and China’s yuan this week.
The ruble fell to around 97 against the dollar on Thursday, its lowest level against the greenback since October of 2023. The ruble traded around 13.72 against the yuan, also the lowest level against China’s currency in a year.
Pressure on the ruble has mounted as Moscow faces the expiry of a key US Treasury license, which permits transactions from some Russian financial institutions.
The license, which expires on October 12, has allowed some transactions between the Moscow Exchange and the National Clearing Center to gradually wind down rather than be halted all at once.
Dollar and euro trading have already been shut down on the Moscow Exchange, but transactions with Chinese banks could also dry up once the US Treasury license expires on October 12, potentially limiting Russia’s supply of China’s yuan, Reuters reported last month.
Russian banks have nearly depleted their stash of yuan, thanks to more Chinese banks growing hesitant to do business with Russia due to tightening US sanctions. Most Chinese banks have stopped processing transactions from Russia, and Russian businesses this year have been locked out of billions as payment issues pile up abroad, central bank data shows.
The new limitations would create another challenge for Russia’s economy, which has grown increasingly isolated from the rest of the global market since it began its invasion of Ukraine in 2022.
Russia’s economy can probably continue to plow ahead for a few more years before it needs to confront major budget problems, a think tank researcher wrote this week.
