The Russian rouble (RUB) is falling further as pressures mount over US sanctions and Syria
The Russian rouble fell for a third day today as the fallout from new US sanctions continued to heap pressure on Russian companies and markets.
After dropping around eight per cent since the start of the week, the rouble shed nearly a further three per cent this afternoon, with one dollar buying 65 roubles at its lowest point. The currency was pushed down by President Donald Trump’s warning to Russia to “get ready” for missiles fired into Syria, saying “they will be coming”.
Russia vows to shoot down any and all missiles fired at Syria. Get ready Russia, because they will be coming, nice and new and “smart!” You shouldn’t be partners with a Gas Killing Animal who kills his people and enjoys it!— Donald J. Trump (@realDonaldTrump) April 11, 2018
Oil prices rose to their highest point since December 2014 on the back of the news while the price of gold shot up by about one per cent to $1,358.40 per troy ounce.
It came as Rusal, a Russian aluminium producer controlled by sanctions-hit oligarch Oleg Daripaska, said two more non-executive directors will leave its board after Ivan Glasenberg, the chief executive of Glencore, stepped down yesterday.
In a filing to the Hong Kong stock exchange today, Rusal said Maksim Goldman and Daniel Lesin Wolfe had resigned due to the inclusion of Rusal on the US sanctions list.
Ratings agency Moody’s also said it will withdraw its rating of Rusal today, citing “its own business reasons”.
In a separate filing, Rusal said it was evaluating the effect of the London Metal Exchange’s (LME) decision to suspend deliveries from any of Rusal’s company’s brands to LME-approved warehouses, effective from 17 April.
Rusal said:
Shareholders and potential investors are advised to exercise extreme caution when dealing in the securities of the company.
After Glencore yesterday said it was reviewing its contracts with Rusal, the number one producer of aluminium outside China, Rio Tinto told shareholders at its annual general meeting today that it will also examine its relationships with the firm.
Shares in Rusal were down another 2.38 per cent in Hong Kong today after tumbling nearly 60 per cent over the previous two days.
Meanwhile, former UK energy minister Lord Barker reportedly plans to continue as the chairman of London-listed En+, which is also controlled by Deripaska. Trading in the firm’s shares has been suspended.
Both Rusal and En+ are set to be deleted from FTSE Russell’s equity indexes, effective from the open on 13 April.
En+ will be erased from the Russell Global and Russell Developed indexes while Rusal will be deleted from the FTSE All-World, FTSE MPF All-World, FTSE Developed, FTSE Global Large Cap, FTSE Multinationals and FTSE Global Style indexes.
As question marks arise over aluminium supplies, prices have rocketed up. On the LME, prices have risen by about 13 per cent since the day before the US announced sanctions.
Read more: Double t-rouble: Russian currency hammered from souring relations