(Bloomberg) — The ruble slumped to a two-week low on Monday, before paring losses, as tensions over Russia’s military buildup near Ukraine enter a potentially decisive week.
Russia’s currency slid as much as 1.4% to 78.2900 per dollar, and was 0.1% weaker at 8:49 a.m. in Moscow. That followed a 2.8% plunge on Friday. Tensions over Ukraine have weighed on the ruble, even after the central bank on Friday delivered its third 100 basis-point interest-rate hike in less than a year.
U.S. National Security Advisor Jake Sullivan told CNN on Sunday there’s “a distinct possibility that there will be major military action very soon,” adding to comments on Friday that Russia will attack or seek to ignite conflict within Ukraine this week. Russia has repeatedly denied it plans to invade its neighbor and Russian officials accuse the U.S. of stoking “hysteria.”
“Amid the uncertainty from the Ukraine-Russia front, markets are heavily tilted towards a defensive mood, with the potential escalation of conflict between global superpowers drawing a clear step away from taking on risks,” said Jun Rong Yeap, a strategist at IG Asia Pte. “Any breakdown of diplomatic efforts this week will be a catalyst for further market panic.”
