Fears of the repercussions of sanctions drop ruble to its lowest level in 8 months against USD

The Russian ruble fell to an eight-month low against the dollar as it suffered under expectations that sanctions targeting Russian oil and gas could limit export earnings.

The ruble fell 0.9% against the dollar by 0717 GMT to 72.83, its weakest level since April 27.

It also fell 0.7% to 76.93 against the euro, and by 0.6% against the yuan to 10.31.

The ruble lost key support for the end-of-month tax period when exporters usually convert their foreign exchange earnings into rubles to pay domestic obligations. The combination of the impact of the recovery of imports and the decline in exports intensified the pressure.

President Vladimir Putin this week announced Russia’s long-awaited response to the West’s imposition of a cap on oil prices, signing a decree banning the supply of crude oil and oil products from Feb. 1 for five months to countries that adhere to the cap.

The ruble has lost about 15% of its value against the dollar since the price cap came into effect on Dec. 5.

The Russian economy is preparing to enter 2023 and is in an unstable situation.

November economic data published on Wednesday showed signs that a labor shortage linked to Putin’s partial mobilization order at the end of September was undermining growth prospects.