MOSCOW: The Russian rouble suffered its worst week against the dollar this year, tumbling on a lack of foreign currency in Moscow and on the sale of Western businesses in Russia, despite gaining slightly on Friday afternoon as traders locked in profits.
The rouble skidded more than 2 per cent against the U.S. dollar on Friday to an intraday low of 83.50, its weakest since April last year, and fell more than 2pc against the euro to an intraday low of 91.32 against.
Later in the day it recovered and was up 0.2pc against the dollar at 81.21 on trade of about $1.5 billion – the highest volumes in at least two weeks – as trading desks locked in their profits ahead of the weekend.
Overall the rouble was down more than 5pc against the dollar on the week.
Earlier, the rouble had nosedived to 113 per dollar after President Vladimir Putin ordered the invasion of Ukraine in February 2022, but the central bank and finance ministry helped stabilise the currency, and it strengthened to 50 per dollar in July.
The West then imposed a price cap on Russian oil — the lifeblood of the Russian economy — late last year, after which the rouble has again weakened from about 60 per dollar to more than 80 this week.
Traders said the Russian currency has come under pressure recently from a cocktail of problems including the sale of Western assets to domestic investors, which stoked demand for dollars, while lower oil prices in March cut the country’s export revenue.
The reported transfer of $1.21bn to Shell for its stake in the Far East Sakhalin-2 gas project was cited by traders as a major factor on Friday, as the daily trade in the rouble-dollar pair is now usually only about $1bn, down from more than $3bn a day before the war.
Published in Dawn, April 9th, 2023
