Rouble sinks to over 9-month low vs dollar after U.S.-Russia talks

  • 1/21/2022
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Russia-U.S. talks yield no breakthrough Rouble weakens to lowest vs dollar since mid-April Russian stocks slump after sign of recovery Russian assets sensitive to geopolitics MOSCOW, Jan 21 (Reuters) - The rouble tumbled to a more than nine-month low versus the dollar in volatile trade on Friday, followinghigh-level talks between Moscow and Washington to discuss soaring tensions over Ukraine, while Russian stocks fell. The top U.S. and Russian diplomats made no major breakthrough at talks on Ukraine on Friday but agreed to keep talking to try to resolve a crisis that has stoked fears of a military conflict. read more The West fears Russia may invade its neighbour. Russia denies planning an attack, but says it could take unspecified military action if a list of demands are not met, including a promise from NATO never to admit Ukraine. By 1609 GMT, the rouble was 1% weaker against the dollar at 77.41 , after touching 77.50, its weakest point since April15. In yet another volatile session, it had earlier strengthened by as much as 0.5%. The rouble has a wide mid-term range between 74 and 78 versus the greenback, said Dmitry Polevoy, head of investment at Locko Invest. The currency had lost 1.3% to trade at 87.86 versus the euro , a one-week low. BCS Global Markets said all eyes were on the Lavrov-Blinken meeting, with tensions the highest they have been in years. Russian assets could come under further pressure if new sanctions are imposed, something Western powers have threatened if Moscow engages in hostilities against Ukraine, but Russian officials say the country"s finances are healthy and economic fundamentals are strong. read more Moscow is also grappling with rising COVID-19 cases, which hit a record high of 49,513 on Friday as the Omicron variant spread across the country. read more Russia"s 10-year OFZ bond yields rose to 9.42%, heading back towards the 9.52% reached earlier this week, their highest since early 2016. Yields move inversely to prices. Brent crude oil , a global benchmark for Russia"s main export, was down 0.6% at $87.83 a barrel, adding to pressure on Russian stock indexes, which were reversing gains from Thursday"s recovery. The dollar-denominated RTS index (.IRTS) was down 3.4% to 1,401.9 points. The rouble-based MOEX Russian index (.IMOEX) was 2.2% lower at 3,439.3 points. Shares in retailer OR Group (ORUP.MM) were down more than 20% after it failed to redeem bonds for 592 million roubles ($7.7 million).

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