Ruble Weakens as Ukraine Rebels Regroup: Russia Reality Check

As markets react in real time to Russia’s incursion into Crimea and the annexation of the Black Sea peninsula, the ruble slid for a third day on continued unrest in Ukraine’s east.

The ruble dropped 0.5 percent to 34.5715, paring its gain since President Vladimir Putin’s intervention in Ukraine started on March 1 to 3.8 percent. Ukraine stepped up air patrols over Donetsk as a convoy of pro-Russian rebels moved through the city with an anti-aircraft gun in tow, threatening renewed violence after clashes this week left dozens dead.

The chart shows the performance of stocks, bonds and the ruble, along with indicators of Russian investment risk. The yield on benchmark local-currency bonds due February 2027 fell eight basis points to 8.87 percent, an increase of 51 basis points since Feb. 28. The Micex added 0.6 percent to 1,425.95, trimming its drop in the period to 1.3 percent.

The top panel displays the value of the Micex Index of 50 Russian equities, government debt in the Bloomberg Russia Local Sovereign Bond Index, and the ruble relative to the dollar. Credit default swap rates on Russian bonds due in five years appear in the bottom panel. The yield gap between Russian debt and U.S. Treasuries and the one-month implied volatility of the ruble are also tracked.

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