- Interrupted mercenary mutiny stirs instability in Russian market
- Ruble hits near 15-month low vs dollar in early trade
- Russian currency recovers after reaching 87.23 vs dollar
- Analysts see continued pressure ahead for the ruble
June 26 (Reuters) – The Russian ruble fell to a near 15-month low against the dollar in early trade on Monday before paring losses as investors reacted for the first time to an aborted mutiny by heavily armed mercenaries in Russia over the weekend.
By 0915 GMT, the ruble was 0.1% stronger against the dollar at 84.60, recovering from hitting 87.2300 in early trade, its weakest point since March 2022.
It had gained 0.3% to trade at 92.10 against the euro and strengthened 0.2% against the yuan at 11.68, also recovering from hitting more than two-month lows against both currencies.
Mercenaries led by Yevgeny Prigozhin withdrew from the southern Russian city of Rostov-na-Don overnight on Saturday under a deal that halted their rapid advance on Moscow but left questions about President Vladimir Putin’s grip on power.
“Politics again has a negative impact on investors’ mood,” said Alexey Antonov at Alor Broker. “The peak of tensions has passed, but an unpleasant residue will linger for some time.”
When the ruble was not traded over the weekend, Russian banks had offered exchange rates well above the official rate of over 90 to the dollar, but they gradually eased as tensions eased.
“The ruble in the cash market sold off sharply on Saturday with bid/offer spreads widening significantly,” Goldman Sachs said in a note.
But Russian authorities have plenty of resources to support the currency, Goldman Sachs said, looking at financial economics as the main determinant of the currency’s movements.
“Should the response to the events of the weekend be additional spending, we believe this will be followed by a weaker ruble.”
Investors around the world were looking for spillovers from the aborted mutiny, with some expecting a move to safe havens such as US Treasuries and the dollar.
Brent crude, a global benchmark for Russia’s main export, was up 0.2% at $74.02 a barrel.
Russian stock indices were lower.
Sinara Investment Bank said Friday night’s “unexpected and dramatic events” had provoked a sell-off, but the quick resolution of the situation over the weekend meant a further sell-off was unlikely.
“Market participants may be cautious for a while,” Sinara said.
The dollar-denominated RTS index (.IRTS) was down 1.3% at 1,026.0 points. The ruble-based MOEX Russian index (.IMOEX) was 1.5% lower at 2,754.2 points.
Most companies’ shares outperformed the main index after falling sharply in after-market trading late on Friday.
Reporting by Alexander Marrow; additional reporting by Karin Strohecker; Editing by Kim Coghill and Ed Osmond
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