Rouble Takes a Hit Amid Rising Demand for Foreign Currency

The Russian rouble weakened against the dollar on Friday as the demand for foreign currency increased. Traders have linked this dip to the surprise Ukrainian attack in Russia's Kursk region. As of 0750 GMT, the rouble had fallen 0.8% to 84.35 against the dollar.

Market analyses indicated a 0.1% drop to 11.89 against the yuan, now the most traded foreign currency in Moscow. Russian forces are battling Ukrainian troops for a fourth consecutive day after Ukrainian forces breached the border, marking one of the biggest attacks since February 2022.

"This might be a justified reason for foreign banks remaining in Russia to buy currency," said a dealer at a large Russian bank. The rouble's decline was expected to be offset by increased daily net foreign currency sales by the central bank and finance ministry starting Aug. 7. However, sanctions imposed on the Moscow Exchange have complicated market pricing.

The rouble also fell 0.6% to 93.32 against the euro. Brent crude oil, a key export for Russia, declined 0.1% to $79.06 a barrel but was on track for a weekly gain of over 3% as U.S. jobs data alleviated demand concerns.

(With inputs from agencies.)