Russian ruble falls to historic lows after ratings downgrade

Russian ruble and US dollar banknotes are seen in this illustration taken February 24, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

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MOSCOW, March 3 (Reuters) – The Russian ruble fell further on Thursday, hitting record highs against the dollar and the euro, after ratings agencies Fitch and Moody’s downgraded Russian sovereign debt to “junk” status , citing the impact of Western sanctions.

As of 0830 GMT, the ruble was more than 10% weaker against the dollar at 117.5 and had lost more than 7% against the euro to trade at 124.1 on the Moscow Stock Exchange, marking the first time the ruble traded above 110 to the dollar in Moscow. .

Russia’s central bank has imposed a 30% commission on foreign currency purchases by individuals on foreign exchange markets – a measure that brokers say appears designed to curb demand for dollars – but it hasn’t. much to stop the fall of the ruble. Read more

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Russian financial markets have been rocked by sanctions imposed following its invasion of Ukraine, the biggest attack on a European state since World War II.

Russia calls its actions in Ukraine a “special operation” which it says is not designed to occupy territory but to destroy the military capabilities of its southern neighbor and capture what it sees as dangerous nationalists.

Since Russian troops entered Ukraine on Feb. 24, the ruble has lost nearly 30% against the dollar, and analysts said on Thursday it was likely to remain highly volatile. The government has ordered Russian exporters to convert 80% of their foreign exchange earnings into rubles to prop up the local currency, but people are still lining up at banks to buy dollars as the ruble plummets.

Trading on the shares section of the Moscow Stock Exchange remained largely closed on Thursday, a fourth day of central bank-ordered restrictions.

Overnight, Fitch said U.S. and European sanctions barring any dealings with the Bank of Russia would have “a far greater impact on Russia’s credit fundamentals than any previous sanctions.” Moody’s said the severity of the sanctions “exceeded Moody’s initial expectations and will have material credit implications.” Read more

S&P downgraded Russia to sub-investment grade last week. Read more

Russia’s invasion of Ukraine and the sanctions imposed in response have led to dire warnings about the Russian economy, with the Institute of International Finance predicting a double-digit contraction in growth this year.

On Wednesday, index providers FTSE Russell and MSCI announced they would remove Russian stocks from all their indexes, after a senior MSCI executive earlier this week called the Russian stock market “uninvestable”. Read more

For the guide to Russian stocks, see

For Russian Treasury bonds, see

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Reuters reporting; Editing by Kenneth Maxwell and Christian Schmollinger

Our standards: The Thomson Reuters Trust Principles.

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