Russia’s ruble sinks as Moscow allows ‘friendly’ countries to re-enter the bond market

Russian President Vladimir Putin.Getty Images

  • The ruble fell as the Kremlin allowed “friendly” countries to re-enter its bond market.

  • Investors from countries not participating in sanctions against Russia are allowed to trade in debt securities.

  • Russia’s currency fell 1.5% to 61 against the US dollar on Monday.

The ruble sank early on Monday as Russia allowed so-called “friendly” countries to re-enter Moscow’s bond market.

Moscow’s fiat currency fell 1.5% to 61 against the US dollar, while pulling back roughly 0.2% against the euro.

The Kremlin last week announced plans for investors from countries not participating in sanctions against Russia to trade in debt securities.

Russia will convert global depositary receipts, or GDRs, into shares for trading on the Moscow exchange. Russia’s central bank said on Monday it planned to remove GDRs from account holders and then deposit the shares.

Moscow closed its markets in February to clamp down on capital outflows after President Vladimir Putin launched an invasion of Ukraine.

And the ruble’s latest slide has seen the currency hit all-time highs and record lows this year.

After Russia deployed troops to Ukraine, the ruble fell to 121.53 against the dollar, only to recover to 50.01 in June to become the world’s top performing currency. The Russian central bank aggressively raised interest rates to around 20% in an attempt to protect the country from Western and European sanctions.

Meanwhile, at least six large Wall Street banks have started trading in Russian bonds againReuters reported, after US officials offered relief to investors saddled with now-toxic debt.

JPMorgan Chase, Bank of America, Citigroup, Deutsche Bank, Barclays and Jefferies Financial Group have cautiously re-entered the Russian government and corporate bond market. Reuters reported on Monday. They are once again offering to make transactions easier for customers, the outlet said, citing interviews and bank documents.

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