On September 10th, the Russian ruble went down to beyond 70 per US dollar on the Moscow exchange in its lowest point since March 2016.
Xinhua cited data from the Moscow exchange site that showed the ruble was traded at 70.51 per dollar during the day, but it recoiled slightly to 70.38 by 17:45 Moscow Time (1430 GMT), as of 23:50 Moscow Time the against the USD was at 70.56. The session on September 7th, Friday was closed at 69.5088 per USD, so the loss of value happened over the weekend.
The ruble fell down to 60 per USD in early April after several months of stability after the imposition of the previous US sanctions.
The Moscow Times reported that the weaker ruble, hit by new sanctions against Moscow and a sell-off in other emerging markets, is seen filtering into consumer prices and once again boosting inflation, which the central bank has just recently managed to rein in.
Similarly to the loss of value of the Turkish lira, the reasons such as vulnerable economies and the sell-off in other emerging markets do play a role in the decrease. However, the major reason behind the devaluation are the different US, and in Russia’s case also EU, sanctions and tariffs imposed on the countries as a whole or various individuals and organizations.
The US Treasury announced in April it had imposed new sanctions on 38 Russian individuals and entities, including seven business leaders and 17 senior officials, for their alleged “malign activity” around the world.
On August 8th, the US announced its imposition on Russia of a new set of sanctions over the alleged poison attack on ex-Russian spy Sergei Skripal and his daughter Yulia in the British city of Salisbury in March. Russia has denied the allegations, stressing that British authorities have never presented any evidence on the matter.
Following the announcement, on August 9th, the ruble went down in value after reaching its two-year high.
The newly imposed sanctions were separated into two batches, the first one came into effect on August 27th. It banned the supply to Russia of dual-use products, goods and technologies related to U.S. national security, as well as supplies of electronics, components and technologies for the oil and gas industry.
The second batch is likely to be imposed by Washington around November, as reported by Xinhua. They include a ban of all U.S. exports to Russia except for food and agricultural commodities, a ban of all imports from Russia, suspension of flights by the Russian flag carrier Aeroflot to the United States, and a ban on all U.S. bank loans to Russia except for food purchases. Essentially, it suspends almost all of the US exports to the country.
Xinhua reported that the sanctions may also include blocking by the United States of all assistance to Russia from international financial institutions and a downgrade or suspension of diplomatic relations with Moscow.
According to the US, Russia may avoid the second batch of sanctions by providing “reliable assurances” that it “will no longer use chemical or biological weapons,” despite there have no initial evidence to prove that it has used any such weapons. Washignton says Moscow also needs to allow on-site inspections by the UN or other observers, namely the US.
In early August, Sputnik reported that a group of US senators led by Lindsey Graham proposed another anti-Russia sanctions bill, which target dollar-denominated transactions by Russian banks and US nationals’ operations with Russia’s sovereign debt.