Russian currency sinks as ‘friendly’ states re-enter bonds
- The ruble fell as the Kremlin allowed “friendly” countries to re-enter its bond market.
- Investors from countries that did not take part in the sanctions against Russia are allowed to trade in debt securities.
- The Russian currency fell 1.5% to 61 against the US dollar on Monday.
The ruble sank early Monday as Russia allowed so-called “friendly” countries to re-enter the Moscow bond market.
Moscow fiat currency fell 1.5% to 61 against the US dollar, while falling about 0.2% against the euro.
The Kremlin announced plans last week for investors from countries that did not take part in sanctions against Russia to swap debt securities.
Russia will also convert global certificates of deposit, or GDRs, into shares to trade on the Moscow Stock Exchange. Russia’s central bank said Monday it plans to write off account holders’ RDAs and then credit the shares.
Moscow closed its markets in February to better control capital outflows, after President Vladimir Putin launched the invasion of Ukraine.
And the ruble’s latest fall adds to the wild swings the currency has seen after hitting all-time highs and record lows this year.
Following the deployment of Russian troops in Ukraine, the ruble fell against the dollar to 121.53, only to recover to 50.01 in June and become the best performing currency in the world. Russia’s central bank has aggressively raised interest rates to almost 20% in a bid to shield the country from Western and European sanctions.
Meanwhile, at least six major Wall Street banks have resumed trading in Russian bonds, Reuters reported, after U.S. authorities granted a reprieve to investors stuck with the now toxic debt.
JPMorgan Chase, Bank of America, Citigroup, Deutsche Bank, Barclays and Jeffries Financial Group cautiously re-entered the Russian government and corporate bond market, Reuters reported on Monday. They are again offering to facilitate transactions for customers, the outlet said, based on interviews and bank documents.