UPDATE 2-Rouble drops towards 73 vs dollar, stocks fall on geopolitical fears

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(update with further losses of the ruble)

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MOSCOW, Nov 12 (Businesshala) – The Russian ruble weakened more than 1% against the dollar on Friday, extending losses on Thursday on concerns over rising tensions between Russia and Ukraine, which also affected bonds and stocks. does.

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At 1600 GMT the ruble was 1.5% weaker at 72.68, having touched 72.9775, last seen on 4 October, apart from a second-long drop on the Moscow Exchange on 22 October, possibly due to a trading error. Was.

The drop that began overnight was triggered by a Businesshala report that said US officials had told EU counterparts about concerns over a possible Russian military intervention in Ukraine, analysts said.

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BCS Global Markets said, “While not helping ‘Russia’ risk trade, geopolitics is again on the radar as the US flagged to its EU allies that ‘unusual’ Russian movement along the Ukrainian border area.” may indicate a possible escalation of tension in the Said in a note.

The Kremlin dismissed such concerns, saying Russia was not a threat to anyone.

The ruble also came under pressure this week on hopes that the United States may raise rates to fight inflation, which is expected to negatively impact emerging market currencies.

But the currency is likely to retain support from domestic monetary policy as the Bank of Russia is expected to raise its key interest rate from 7.5% at the next board meeting on December 17.

The ruble fell 1.9% to 83.54 against the euro.

Russian stock indexes were also lower, falling 0.7% to $82.27, led by fall in prices of Brent crude, the global benchmark for Russia’s main exports.

“Russian equities are likely to remain under pressure due to a combination of EM risk aversion and heightened geopolitical tensions as Moscow gets dragged into a border dispute between Belarus and the European Union and the US claims Russia Ukraine,” John said. is planning an attack,” said John. Walsh, equity strategist at Alfa Bank.

The dollar-denominated RTS index fell 3.8% to 1,783.43, its lowest since early October, while the ruble-based MOEX Russian index fell 1.6% to 4,123.98. (Reporting by Andrey Ostrokh Editing by David Goodman, Chizu Nomiyama and Andrei Khalip)

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