Rouble at Two-Year Lows as Pressure on Emerging Markets Persists

August 13, 2018 Updated: August 13, 2018

MOSCOW—The Russian rouble was near its lowest level in more than two years versus the dollar on aug. 13, pressured by a broader flight from emerging markets, although it was lent some support by the central bank which halted purchases of foreign currency for its reserves.

In early Aug. 13 trading, the rouble hit the 68.66 mark versus the dollar, a level not seen since April 2016. It later pared those losses and by 11:09 a.m. EDT was 0.44 percent weaker against the dollar at 68.02.

The rouble also lost 0.29 percent versus the euro to trade at 77.47, after earlier briefly going through the 78.15 mark for the first time since April this year.

The Russian currency was under pressure from a slide in fellow emerging market currency the Turkish lira, which dropped to record lows early on Aug. 13.

Brent crude oil, a global benchmark for Russia’s main export, was down 1.81 percent at $71.49 a barrel.

Russian markets were also depressed by prospects that the United States will soon tighten sanctions against Russia.

The rouble began its fall last week when the United States announced new measures targeting Russia. The rouble dropped 6.92 percent, its steepest weekly fall since December 2014.

“If the sanctions issue becomes less sensitive, the rouble may try to pare some of the losses, moving in the direction of 65 roubles per dollar and 75 roubles per euro,” said Tatiana Evdokimova, chief economist at Nordea Bank in Moscow.

The Russian currency was supported by the central bank data that showed it had not purchased the foreign currency, on behalf of the finance ministry, for state reserves on Aug. 9.

Russian stock indexes were up, recovering from losses last week driven by a proposal by a Kremlin economic aide to raise more revenue for the state from metal and mining companies.

The dollar-denominated RTS index ended the day up 0.27 percent at 1,059.76 points. The rouble-based MOEX Russian index gained 0.46 percent to 2,285.61 points.

By Polina Nikolskaya

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