Russia’s Rouble falls against dollar, stocks slide as Putin orders troops to Ukraine

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Russia's Roubel slides against dollar, stocks slide as Putin orders troops to Ukraine

Feb 22, 2022: According to a report by Reuters, The rouble hit a near two-year low and Russian stocks slumped as President Vladimir Putin ordered the deployment of troops to two breakaway regions in eastern Ukraine after recognising them as independent.

The announcement drew immediate international condemnation, and the West is now expected to announce new sanctions against Russia on Tuesday. Potential measures could target large financial institutions, preventing Russia from gaining access to global electronic supplies or blocking energy firms.

The rouble fell 1.1% to 80.64 against the dollar as of 0737 GMT after hitting 80.97, a level last seen on March 23, 2020. Against the euro, the rouble weakened 0.9% to 90.96, after earlier hitting 91.44, its weakest since April 2021. Russian OFZ bonds, which used to be popular among foreign investors thanks to their lucrative yields, fell further. The rouble-based MOEX Russian index was 4.6% lower at 2,899.2 points.

Brent crude oil, a global benchmark for Russia’s main export, was up 2% at $97.40 a barrel but that did not support Russian assets. When oil prices were last near current levels in September 2014, the rouble hovered near 40 to the dollar.

In addition to the currency, Russian stocks markets were also overwhelmed by Western fears that Putin’s move to recognize the independence of the two regions, jointly known as Donbass, and troop deployment to “keep the peace” could lead to a major war.

Russia has repeatedly denied Western claims that it is planning to invade neighboring Ukraine, but its assets have been damaged by fears of a military conflict that could almost certainly lead to new Western sanctions against Moscow.

The United States has said it will suspend US business activities in the breakaway regions and ban all imports from those areas, but said the measures are separate from sanctions Washington and its allies have prepared should Russia launch a full-scale invasion of Ukraine.

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