The ruble extended its losses for the second consecutive day after the U.S. and the European Union imposed harsher sanctions on Russia.
The currency fell by 1.2 percent to 37.97 per dollar before falling to 37.8855 as of 6:53 p.m. Moscow time, resulting in a loss of 2.5 percent this week. The ruble dropped 1.1 percent to 49 per euro and tumbled 1.1 percent versus the central bank’s target basket of euros and dollars to 42.8870. Government bonds that mature in February 2027 rebounded after a five-day losing streak, pushing the yield down by eight basis points to 9.64 percent.
“Market sentiment toward the ruble remains negative, and retaliatory measures from Russia seem certain,” Sberbank CIB analysts, led by Tom Levinson, wrote in a note seen by Bloomberg News. “Such trade restrictions damage both euro-zone and Russian growth prospects and will keep the euro and the ruble pressured.”
The EU rolled out further penalties against 15 Russian businesses, including blocking OAO Rosneft, OAO Transneft and OAO Gazprom Neft from obtaining financing that has a maturity period exceeding 30 days.
The U.S. rolled more sanctions against Sberbank, five government-owned technology and defense firms and energy companies. This means Sberbank is restricted from securing funding with maturity greater than 30 days. Dmitry Peskov, the spokesman for Russian President Vladimir Putin, said Russia may retaliate by banning imports of items such as used cars and clothing.
Meanwhile, the Thai baht fell the most in over a month on speculation U.S. interest rates may be increased soon. The currency posted a weekly drop of 0.7 percent to trade at 3:34 p.m. Bangkok time, the biggest decline since the week through Aug. 1. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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