Russian Stocks Tumble on Fears of Ukraine Invasion, Sanctions Against Moscow

By Tom Ozimek
Tom Ozimek
Tom Ozimek
Reporter
Tom Ozimek has a broad background in journalism, deposit insurance, marketing and communications, and adult education. The best writing advice he's ever heard is from Roy Peter Clark: 'Hit your target' and 'leave the best for last.'
January 24, 2022 Updated: January 24, 2022

Russian stocks tumbled on Monday and the country’s currency sank against the dollar to its lowest level in 14 months as mounting tensions over a possible Russian invasion of Ukraine sparked investor fears of sanctions against Moscow.

The risk-off sentiment initially pushed the MOEX Russia Index down over 7 percent intraday on Monday, with a relief rally clawing back some initial losses. By 9:12 a.m. New York time, the MOEX was down around 5 percent at 3233.85.

After tumbling over 8.5 percent in early trading Monday, the Russian RTS Index was down around 6 percent by 9:17 a.m. New York time, trading at 1292.38.

The Russian rouble dove over 2 percent against the U.S. dollar on Jan. 24 and by 8:55 a.m. New York time was trading at around 78.83 versus the greenback, its lowest level since November 2020.

In a bid to curb the slide of the rouble and reduce financial market volatility, Russia’s central bank on Monday ordered a temporary halt of its foreign currency purchases, the regulator said in a statement.

Volatility has roiled Russian markets in recent weeks amid fears Moscow intends to invade neighboring Ukraine. While the Kremlin has denied any such plans, Western leaders have grown increasingly anxious over a Russian troop buildup near the border.

Authorities in Denmark said the European Union was ready to impose “never-seen-before” economic sanctions if Russia attacked Ukraine.

Amid the growing tensions, The United States said Sunday it was ordering family members of U.S. diplomats to leave Ukraine, while authorizing a voluntary departure of non-essential civil servants. The U.S. Embassy in Kyiv said in a social media post that the decision was “due to continued Russian efforts to destabilize the country and undermine the security of Ukrainian citizens and others visiting or residing in Ukraine.”

Britain’s Foreign, Commonwealth, and Development Office (FCDO) confirmed on Monday it had already started withdrawing some of its embassy staff and dependents from Kyiv, citing a “growing threat from Russia.”

British authorities said Saturday that they had information the Kremlin plans to oust the Ukraine government and replace it with a pro-Moscow regime.

UK Foreign Secretary Liz Truss said in a statement that the information “shines a light on the extent of Russian activity designed to subvert Ukraine, and is an insight into Kremlin thinking.”

Truss urged Russia to “deescalate, end its campaigns of aggression and disinformation, and pursue a path of diplomacy,” and reiterated Britain’s view that “any Russian military incursion into Ukraine would be a massive strategic mistake with severe costs.”

The Kremlin has denied Britain’s claim and accused Western powers of stoking tensions in the region.

“The disinformation spread by the British Foreign Office is more evidence that it is the NATO countries, led by the Anglo-Saxons, who are escalating tensions around Ukraine,” Russian Foreign Ministry spokeswoman Maria Zakharova said in a Jan. 23 statement on Telegram. “We call on the British Foreign Office to stop provocative activities, stop spreading nonsense.”

Russian officials have insisted the country’s finances are healthy and economic fundamentals remain strong.

Kremlin spokesperson Dmitry Peskov blamed the Russian market rout on Western hysteria, telling reporters that, “the sooner our opponents stop their hysterical actions, the quicker this pessimistic mood will disappear.”

Tom Ozimek
Reporter
Tom Ozimek has a broad background in journalism, deposit insurance, marketing and communications, and adult education. The best writing advice he's ever heard is from Roy Peter Clark: 'Hit your target' and 'leave the best for last.'