Wednesday, 29 May 2024

Russian ruble hits record low after fresh sanctions over Ukraine war


Russia’s currency fell 40% on Monday morning after the U.S. and major European countries moved to exclude the country’s major banks from the SWIFT global payments system, Nikkei Asia reported.

The ruble declined to a record low of 117.75 to the U.S. dollar from 83.75 on Friday, according to Bloomberg data.

On Saturday, the U.S. and major European nations said select Russian banks will be removed from SWIFT, the key financial infrastructure banks use to send money across borders. Japanese Prime Minister Fumio Kishida on Sunday said Japan will join the sanctions.

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Japanese brokerages stopped accepting new buy orders for the ruble amid liquidity concerns. Traders Securities, which operates online foreign exchange services, said it expects difficulties in executing trades and providing rates, warning it “may be forced to close our customers’ Russian ruble/yen positions.”

Asian stock and currency markets were volatile in the morning as investors weighed new sanctions on Russia for its invasion of Ukraine, as well as developments on peace talks between the two countries.

Japan’s benchmark 225 stock index was down 0.3% as of 11:30 local time after falling as much as 0.8% in early morning trade, as investors weighed on the sanctions as well as developments of potential Ukraine-Russia peace talks.

South Korea’s Kospi stock index opened slightly lower but fluctuated between gains and losses during morning hours.

The Japanese yen swung against the U.S. dollar, strengthening to around 115.06 to the greenback before weakening to 115.60.

Oil prices rallied in the morning amid rising concerns over supplies from the world’s leading oil producer.

North Sea Brent futures on the London market, an international benchmark, rose to $105 per barrel immediately after the start of trading Japan time, about $7 higher than the settlement price last week.