Economic news

Rouble Slips on Biden Warns Putin on Economic Consequences

MOSCOW, Dec 6 (Reuters) - Russia's rouble slipped into the red in late trading on Monday after U.S. President Joe Biden warned his Russian counterpart Vladimir Putin of severe economic consequences in case of a Ukraine invasion ahead of a call between the two men on Tuesday.

Geopolitical risks have weighed on the rouble in the last month with Ukraine and the West saying Russia is amassing troops near Ukraine. Moscow has in turn accused Kyiv of pursuing its own military buildup and denied suggestions it is preparing an attack.

The rouble softened as much as 0.3% to 74.3791 to the dollar before steadying at 74.2904. The currency has weakened more than 4% in November and has softened since the start of December.

Putin and Biden are set to discuss the tense situation in Ukraine in a video call, along with other topics that include strategic stability, cyber and regional issues in what analysts expected to be a difficult conversation.

"Biden will use the stick of sanctions and the carrot of more talks to try and buy time for Ukraine to continue to build its defences," said Tim Ash at BlueBay Asset Management.

The Kremlin described the state of U.S.-Russia relations as "quite lamentable" on the eve of the call. 

The country's sovereign dollar-denominated bonds also came under some pressure, with longer-dated issues such as the 2047 bond losing 0.5 cents in the dollar to trade at 128.97 cents.

"The Putin-Biden talks may be the main event of the week – the two presidents will discuss Ukraine; while a visible breakthrough is a longshot, some hint that the two camps have found enough common ground to ease tension would be welcomed," BCS Global Markets said in a note.

Oil prices rebounding on hopes the Omicron coronavirus variant would have a less damaging economic impact if its symptoms proved mostly mild did little to support the rouble.

Brent crude oil , a global benchmark for Russia's main export, was up nearly 4% at $72.54 a barrel.

Russian stock had already closed down in the red earlier with both the dollar-denominated RTS index and rouble-based MOEX Russian index finishing around 2.7% lower.

Reporting by Alexander Marrow and Karin Strohecker; editing by Jason Neely and Philippa Fletcher

Source: Reuters

To leave a comment you must or Join us

More news

Back to economic news list

By visiting our website and services, you agree to the conditions of use of cookies. Learn more
I agree