Reuters: The price of the Russian ruble plummeted, crude oil rose

According to Reuters, the value of the Russian ruble plummeted as the “specter” of more sanctions against Moscow haunted the markets before the long holiday weekend.

The Executive Director of the European Union (EU) on May 4 proposed the toughest package of sanctions against Russia because of the “special military operation” it launched in Ukraine on February 24. However, the ban on Russian oil imports has raised concerns among some EU members about its impact on consumer prices.

At 12:01 on May 6 (GMT), the ruble lost 4.7% of its value and traded at 73.45 rubles buy 1 euro. This is the strongest decrease compared to February 2020 (69,1250 rubles to buy 1 euro).

In addition, the ruble lost more than 3.8% in value against the dollar, trading at 69.52 rubles buy 1 USD. The highest level in more than 2 years is 65,3125 rubles buy 1 USD.

The Russian ruble has plummeted in value. Photo: Reuters

The ruble has appreciated in recent weeks as export-focused companies are forced to convert foreign currencies. In addition, demand for the US dollar and euro weakened amid a decline in imports and restrictions in place on cross-border transactions.

“It looks like the ruble has found a new equilibrium around 67 rubles to the dollar, at least for now. However, we think the Russian currency could start to strengthen again. at the end of the May holiday next week,” – analysts of Sberbank CIB (Russia) commented and predicted that the ruble could rise to 60 rubles to buy 1 USD by the end of May.

The ruble’s volatility is stronger than usual as market liquidity has been reduced as Russia’s central bank has introduced restrictions to support financial stability, Reuters reported. Meanwhile, deals are dwindling as the market is only open for three days this week amid Russia’s extended May holiday.

Brent crude oil price increased 1.7% to 112.8 USD/barrel. In contrast, Russia’s stock indexes fell.