Rouble Hits Two-Year Low Amid Sanctions and Missile tensions

The Russian rouble plunged to a new low due to Washington's sanctions against Gazprombank and heightened geopolitical tensions following Moscow's hypersonic missile launch in Ukraine. With the new restrictions, concerns are growing about the rouble's future, currency trade volatility, and potential impact on both exports and imports.

The Russian rouble tumbled to a two-year low against the dollar on Friday as geopolitical tensions and stringent sanctions took a toll. The sanctions came after Washington targeted a key bank that facilitates Russia's gas exports, following Moscow's new hypersonic missile test amidst ongoing conflict with Ukraine.

The missile, dubbed the 'Oreshnik' or 'Hazel Tree', was launched at a Ukrainian military installation in retaliation for Kyiv's use of U.S. and British-produced missiles. Concurrently, the U.S. imposed fresh sanctions on Gazprombank, restricting its ability to handle new energy-related transactions—affecting European payments for Russian gas.

Yevgeny Kogan from Moscow's Higher School of Economics highlighted sanctions as the primary cause for the rouble's decline. Analysts predict continued volatility, although some foresee medium-term strengthening due to potential reduced demand for foreign currency. Meanwhile, Brent crude oil prices also fell, highlighting broader economic impacts.

(With inputs from agencies.)