June 26 (Reuters) – The ruble fell against the dollar for the first time in almost 15 months on Monday in one of the most volatile trades of the year as investors reacted for the first time to the end of the weekend’s armed mercenary uprising in Russia. dropped to a low price.
A mercenary force led by Yevgeny Prigozhin withdrew overnight from the southern Russian city of Rostov-on-Don on Saturday under an agreement to halt its rapid march on Moscow, but calls for President Vladimir Putin to seize power and the loyalty of the people. Officials remained skeptical.
The ruble sank 0.5 percent against the dollar to 85.10 by 1400 GMT, aided by month-end tax payments that exporters typically convert foreign currency earnings to meet local debt.
It oscillates between 87.2300 and 84.25, its lowest since March 2022, making it the widest single trading range in 2023.
The ruble fell 0.6% against the euro to 92.92 yuan and 0.2% against the euro to trade at 11.74 yuan, but recovered after hitting the lowest in more than two months against both currencies.
Monday’s decline came after a surge in foreign currency demand over the weekend, when Russian banks offered exchange rates well above the official rate of more than $90 to the dollar.
First Deputy Prime Minister Andrei Belousov said about 15 regions saw a surge in demand for foreign exchange.
“On average, about 30%, the most active growth in cash demand was recorded in the southern regions of Voronezh, Rostov and Lipetsk, as well as in large cities,” Belousov said. “The demand there has increased by about 70 to 80 percent.”
weekend sale sale
Analysts blamed domestic politics, with Arrow Broker Alexei Antonov warning that although the peak of tensions had passed, an “unpleasant residue” would remain for some time.
“Saturday, the ruble sold off significantly in the spot market, with buy-sell spreads widening significantly,” Goldman Sachs said in a note.
However, Goldman Sachs said the Russian authorities have abundant resources to support the currency and sees fiscal policy as the most important determinant of currency movements.
“We believe the ruble’s weakness will continue if the weekend’s events result in additional spending.”
Investors around the world focused on the repercussions of the failed rebellion, with some hoping to invest in safe haven assets such as U.S. Treasuries and the dollar.
Brent crude, the global benchmark for Russia’s main export, rose 0.7% to $74.41 a barrel.
Russian stock indices fell.
Cinarra Investment Bank said an “unexpected and dramatic event” on Friday night sparked a sell-off, but further selling was unlikely as the situation was quickly resolved.
The dollar RTS index (.IRTS) fell 1.4 percent to 1025.8 points. The ruble-based MOEX Russia index (.IMOEX) fell 0.9 percent to 2,770.8 points.
Shares of most companies have outperformed major indexes after falling sharply in after-hours trading late Friday.
Reported by Alexander Marrow. Additional reporting by Karin Strohecker.Editing: Kim Ko Gil and Ed Osmond
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