Russian rouble, stocks slip after Ukraine dam breach

The rouble weakened and Russian stocks tumbled to around two-week lows on Tuesday after a major Soviet-era dam in the Russian-controlled part of southern Ukraine was breached and oil prices slipped.

The rouble weakened and Russian stocks tumbled to around two-week lows on Tuesday after a major Soviet-era dam in the Russian-controlled part of southern Ukraine was breached and oil prices slipped. Millions of litres of water burst through a gaping hole in the Nova Kakhovka dam, flooding a swathe of the war zone in southern Ukraine, threatening scores of villages and cutting off water supplies.

The Kakhovka reservoir also supplies water to the Zaporizhzhia nuclear plant, which is under Russian control. By 0833 GMT, the rouble was 0.5% weaker against the dollar at 81.33 and had lost 0.3% to trade at 87.08 versus the euro. It had lost 0.3% to 11.41 against the yuan.

Brent crude oil, a global benchmark for Russia's main export had hit a more than one-month high in the previous session, supporting the rouble. On Tuesday, it was down 2.1% at $75.10 a barrel. The rouble drew support from higher FX sales by Russian firms that are accumulating cash for dividend payments and an upcoming increase in FX sales by the finance ministry.

"But there is not much to be happy about - such steps mean the budget is short of oil and gas revenues," said Alor Broker. The market is looking ahead to Friday, when the central bank is widely expected to keep rates on hold at 7.5%.

Russian stocks opened lower on Tuesday. The dollar-denominated RTS index was down 1.9% at 1,028.7 points, a near four-week low. The rouble-based MOEX Russian index was 1.4% lower at 2,655.6 points, a near two-week low.

"There are no signs of panic yet, however, while dividend payments and announcements are continuing to provide support, so after a refreshing correction, the market could well reach new highs this week," Sinara Investment Bank said. For Russian equities guide see

For Russian treasury bonds see

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