Rouble on the Rocks: Economic Turbulence in Russia
Russia's rouble tumbles past 81 to the dollar, reacting to a major interest rate cut and U.S. President Trump's ultimatum for a ceasefire in Ukraine. Russian stocks decline as economic pressures mount, with implications for President Putin. The central bank's efforts target reviving growth amid easing inflation.
The Russian rouble fell below the 81 mark against the dollar for the first time since May, driven by last week's significant interest rate cut and U.S. President Donald Trump's shortened deadline for a ceasefire with Kyiv.
The slide in Russian stocks came as Trump imposed a tighter timetable of 10 to 12 days for Russia to progress towards peace in Ukraine, raising pressure on President Vladimir Putin. The central bank's hefty 200-basis-point rate reduction to 18%—the largest since May 2022—aims to stimulate lending and invigorate slow economic growth, amid easing inflation.
By 1513 GMT, the rouble had declined by 2.1% to 81.0955 per U.S. dollar according to LSEG's over-the-counter data. "The impact of tight monetary policy as a support factor for the rouble is expected to diminish," said Maxim Timoshenko of Russian Standard Bank. Meanwhile, against the Chinese yuan, the rouble fell by 2.4%. Russia's MOEX index lost early gains, with Aeroflot shares dropping after a cyberattack led to flight cancellations. Brent crude rose 1.7% to $69.63 a barrel.
(With inputs from agencies.)
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