Russian Rouble Weakens Amid Kursk Region Conflict

The Russian rouble weakened further against the dollar, influenced by Ukraine's surprise attack in Kursk. Western sanctions on Moscow Exchange shifted major currency trading to the OTC market, making pricing data less visible. Experts predict moderate moves in the rouble within the OTC market, despite recent market interventions.

The Russian rouble experienced further depreciation against the dollar on Friday, as reported by LSEG and Moscow stock exchange data, with Ukraine's unexpected offensive in Russia's Kursk region cited by some traders as a contributing factor.

Currency trading has largely shifted to the over-the-counter (OTC) market due to Western sanctions imposed on the Moscow Exchange and its clearing agent, the National Clearing Centre, since July 12. By 1130 GMT, the rouble had declined 2.7% to 89.00 against the dollar. One-day rouble-dollar futures on the Moscow Exchange dropped 0.8% to 86.44.

Sanctioned Russian banks like Sberbank showed more moderate moves in the OTC market. As Russian forces clash with Ukrainian troops following an incursion through the Kursk border, the rouble's support from currency sales remains uncertain. Despite interventions, market expectations were dampened, leading to increased foreign currency hoarding by importers. The rouble also weakened against the yuan and euro, while Brent crude prices saw an uplift driven by positive U.S. jobs data.