Russian ruble hits new high in thin offshore trade

Russian ruble banknotes are seen in this illustrative photo taken in Moscow, September 30, 2014. REUTERS/Maxim Zmeyev

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LONDON, March 7 (Reuters) – The Russian ruble fell to a new record low in offshore trading on Monday, with local markets closed to trading until at least Wednesday.

The ruble weakened to 133.5 to the dollar after closing at 121.037 on Friday, according to Refinitiv data. On the EBS trading platform, the ruble weakened to 141.00 per dollar.

Bid/ask spreads were between 10 and 15 cents, indicating an increasingly illiquid market.

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Trading on the Moscow MOEX exchange is expected to be closed until Wednesday for a public holiday.

The ruble has lost more than 40% of its value against the greenback since the start of the year, with losses accelerating sharply since Russia invaded Ukraine on February 24, triggering sweeping sanctions from Western capitals.

Restrictions on Russia, its lenders, companies and key people, as well as Moscow’s countermeasures, have increasingly removed Russian assets from global financial markets and made it difficult for investors to trade securities. .

“It became very difficult to trade the ruble after the sanctions,” said Aaron Hurd, senior portfolio manager, currencies, at State Street Global Advisors. “Liquidity disappeared and markets became very volatile.”

Russia calls its actions in Ukraine a “special operation”.

The shares were last traded on Feb. 25 on the Moscow Stock Exchange. (.IRTS), (.IMOEX)

Russia’s five-year credit default swaps – reflecting the cost of insuring the country’s sovereign debt exposure – hit a record high of 2,619 basis points from 1,725 ​​basis points on Friday, data showed. from IHS Markit. Read more

Trading in Russia’s dollar- and euro-denominated sovereign debt has all but stopped, with some issues selling for around 20 cents in dollars or euros.

“With Russian euro bond prices around 20, it’s going to be a very, very long time, and no one wants to be associated (with the rouble),” said Gabriel Sterne, head of global emerging markets research at Oxford. Economics. .

“Just sell it and take a loss. You have to interpret the price movements as follows: there is an almost infinite supply and very little demand for these assets at the moment. an orderly divestment of Russian assets.”

Implied volatility gauges for the ruble – a measure of demand for options on the currency rising or falling against the dollar – remained close to the highs reached last week, with the one-week gauge above 84% and that of a month above 94%. ,

The collapse of the ruble also affected trading volumes. The Russian currency’s turnover on EBS fell more than 80% on Friday compared to the end of February.

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Reporting by Karin Strohecker; Additional reporting by Saikat Chatterjee and Anisha Sircar; Editing by Edmund Blair and Mark Potter

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