The Russian rouble plunged to almost a two-week low against the U.S. dollar on Monday, as initial optimism for resolving the Ukraine conflict diminished, coupled with the conclusion of a beneficial tax period. By 1411 GMT, the rouble was traded down by 0.2%, settling at 89.57 to the dollar in the over-the-counter market, briefly breaching the 90 threshold for the first time since February 19.
Additionally, the rouble weakened by approximately 1% against the yuan, the most traded foreign currency in Russia. The currency had shown strength earlier in the year, driven largely by expectations of improved Moscow-Washington relations that could lead to conflict resolution in Ukraine and potential easing of sanctions.
Denis Popov from Promsvyazbank noted a cautious correction began late last week, as the rouble had significantly strengthened in February. Over the weekend, discussions highlighted the improbability of a quick geopolitical compromise, indicating potential further weaknesses for the rouble. The currency also lost the support of a favorable tax period, typically marked by exporters converting foreign earnings into roubles. Meanwhile, Brent crude oil, a key Russian export, ticked up by 0.1%, priced at $73.24 a barrel.
(With inputs from agencies.)
