Ruble at 10-Week Low on Russian Sanctions

By Chiara Albanese 

The ruble picked up slightly against the dollar after the European Union's fresh sanctions against Russia delivered no surprises.

The currency had hit its weakest levels since early May earlier Tuesday, reflecting concerns that the sanctions could weigh heavily on Russian assets.

The ruble is now trading around 35.53 against the dollar, which earlier hit 35.77 to mark the ruble's weakest level since May 6. The ruble has strengthened a bit against the euro as well. Earlier Tuesday, the single currency climbed above 48 rubles for the first time since May 13, but is now at 47.63.

"It didn't shock anyone and the currency has already shifted a long way over the last two weeks," said Charles Robertson, chief economist at Renaissance Capital. The ruble has lost almost 6% during the month so far.

Still, the new sanctions are likely to keep European currencies under pressure, said Citigroup currencies strategist Valentin Marinov. "The market is anxious about the growth impact of the measures, not only in the case of Russia but European Union as a whole," he said.

In the medium term, financial flows from international investors selling Russian assets are likely to keep pressure on the ruble, analysts and investor say.

In stocks, before the new sanctions were announced, Russia's Micex index closed 0.58% higher, while the dollar-traded RTS index lost 0.13%. Since the start of the year, the two indexes have fallen more than 7% and 12% respectively.

Write to Chiara Albanese at [e-mail]