Rouble Wavers as Global Currency Dynamics Shift

The Russian rouble weakened against the U.S. dollar amid potential de-escalation in the Ukraine conflict following talks between Trump and Putin. Despite stability against China's yuan, the rouble faces liquidity issues and Western sanctions, moving dollar and euro trades to the OTC market.

The Russian rouble faced a decline against the U.S. dollar on Monday, as stakeholders assessed the implications of potential de-escalation in the ongoing Ukraine conflict. This follows recent discussions between U.S. President-elect Donald Trump and Russian President Vladimir Putin, which sparked speculation over easing tensions.

At 0830 GMT, the rouble was reported 0.4% weaker against the U.S. dollar, marked at 98.00 by LSEG data. Meanwhile, it held steady against the Chinese yuan and saw a minor 0.2% drop against the euro. Analysts highlighted an improvement in yuan liquidity in November, succeeding prior shortages. Currency trade dynamics have shifted as Western sanctions on MOEX halted dollar and euro exchanges on the Moscow Exchange, pushing the yuan to prominence in Russia.

Trading of dollars and euros has transitioned to the over-the-counter market, adding opacity to pricing information. Trump recently advised Putin against escalating the Ukraine conflict, according to a Reuters source. Moscow Exchange's one-day rouble-dollar futures, a metric for OTC rates, rose 0.3% to 98.06. The central bank's official exchange rate stood at 97.83 to the dollar. Brent crude continued its slight downward trend, stabilizing at $74.05 per barrel.

(With inputs from agencies.)