The ruble retreated 0.7 percent to 38.0550 per dollar as of 2:08 p.m. in Moscow. Government bonds due February 2027 dropped, raising the yield three basis points to 9.67 percent.
The ruble fell to a record low for a third day as oil, Russia’s main export earner, slid to the weakest level in two years and fresh U.S. and European Union sanctions over Ukraine stoked concern the crisis will deepen.
The U.S. and the EU stepped up their sanctions last week on Russia, stoking concern over further capital outflows and weakening the ruble. Brent oil slid 0.4 percent to $96.75 a barrel today. Russia receives about half its budget revenue from oil and natural gas taxes.
The new penalties “risk spinning the wheel of retaliatory sanctions from Russia even stronger, which complicates the search for a diplomatic solution to the crisis,” Dmitry Polevoy, chief economist for Russia and the Commonwealth of Independent States at ING Groep NV in Moscow, said in an e-mailed note. “Tactically the market still stands against the ruble, and I see no sense opposing it.”
The ruble lost 0.5 percent to 49.1910 per euro and weakened 0.6 percent against the central bank’s basket of dollars and euros to 43.0679. Russia’s currency has weakened 14 percent against the dollar since the start of the year, the most among 24 emerging-countries currencies after Argentina’s peso. The central bank intervenes to slow the ruble’s declines at 44.40 rubles per basket.
The regulator kept its key interest rate unchanged at 8 percent on Sept. 12 after raising it a total of 250 basis points since President Vladimir Putin’s incursion in Ukraine’s Crimea region at the start of March.
The central bank plans “no action in response to the ruble’s weakening,” Vladimir Evstifeev, an analyst at OAO Bank Zenit in Moscow, said in an e-mailed note.