Rouble's Dance Above the 100 Mark: A Year-Long High

The Russian rouble has hit its highest level against the U.S. dollar in over a year, though it remains volatile amid geopolitical tensions and sanctions. The rouble's rise to above 100 against the dollar reflects ongoing financial instability due to Western sanctions and regional conflicts.

The Russian rouble strengthened slightly against the U.S. dollar on Thursday but remained above the 100 mark, hitting its highest level in over a year. At 0900 GMT, the rouble was up 0.1% at 100.50 against the dollar, though it stayed flat at 106.15 to the euro, according to LSEG data. The rouble also fell by 0.3% against the yuan, settling at 13.86 on the Moscow stock exchange.

This elevation in the rouble's official exchange rate, as set by the central bank, breaks the 100 mark against the U.S. dollar for the first time since October 2023. This financial shift occurs amidst growing concerns over Russia's escalating tensions with the West. The rouble has been in decline since the Ukraine incursion into Russia's Kursk region on August 6, losing about 19% of its value to the dollar according to LSEG data.

Western sanctions imposed on the Moscow Exchange (MOEX) and its clearing agent, the National Clearing Centre, on June 12, halted all trade in dollars and euros at MOEX. The central bank utilizes over-the-counter trade data from banks to set the official dollar rate, introducing an element of opacity and volatility into the exchange rate. Meanwhile, the one-day rouble-dollar futures, also trading on the Moscow exchange, were up 0.5% at 100.74. In addition, Brent crude oil, a key export for Russia, saw an increase of 0.7% as fears of intensifying tensions between Russia and Ukraine overshadowed larger-than-anticipated U.S. crude inventories.

(With inputs from agencies.)