Ruble Slips again on Virus Concerns, Cheaper Oil

The ruble gained early on Monday but soon slipped to two-month lows as investors reassessed risks related to the outbreak of China’s coronavirus and a drop in oil prices, Reuters reported.

The Russian currency was 0.2% weaker against the dollar (64.04), at 0825 GMT, a level last seen in early December. Versus the euro, the ruble eased 0.1% to trade at 70.94.

Having weakened from the 60.9 versus the dollar seen in early January, the ruble remains volatile.

“The pace of the rouble weakening in the past two days increases chances today for an attempt to reach the level of 64.50 roubles per dollar,” said Dmitry Polevoy, chief economist at the Russian Direct Investment Fund (RDIF).

“But any improvement or stabilization in the global backdrop may lead to an equally sharp appreciation in the rouble.”

Investors worried about the spread of the coronavirus wiped more than $400 billion off the value of China’s stocks in the first trading session on Monday after an extended Lunar New Year break. The death toll from the epidemic rose to 361.

To stabilize the market, China’s central bank said it will inject 1.2 trillion yuan ($174 billion) worth of liquidity into the markets via reverse repo operations.

That did not stop oil prices from falling to the lowest level in a year, dragged down by concerns about lower demand in China, the world’s largest oil importer.

Brent crude oil, a global benchmark for Russia’s main export, was down 0.8pc at $56.13 a barrel, putting pressure on Russian stock indexes.

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