Russian rouble dives more than 1%, slammed by political risks

Credit: REUTERS/MAXIM SHEMETOV

The Russian rouble fell more than 1% on Tuesday, bucking the generally positive mood on global markets due to political turmoil in neighbouring Belarus and pressure on Moscow to investigate the suspected poisoning of an opposition leader.

By Gabrielle Tétrault-Farber and Andrey Ostroukh

MOSCOW, Aug 25 (Reuters) - The Russian rouble fell more than 1% on Tuesday, bucking the generally positive mood on global markets due to political turmoil in neighbouring Belarus and pressure on Moscow to investigate the suspected poisoning of an opposition leader.

The crisis in neighbouring Belarus has raised concerns that Moscow could offer a helping hand to long-standing Belarusian leader Alexander Lukashenko or intervene in some way.

The Russian currency slipped 1.3% to 75.60 against the U.S. dollar by 1635 GMTRUBUTSTN=MCX, the lowest since early-May.So far this year, the rouble shed more than 16% of its value against the greenback.

Against the euro, the rouble lost 1.6% to touch the lowest level since March EURRUBTN=MCX. The losses on the currency as well as Russian stocks come despite a 1.6% price rise for crude oil, Russia's main export LCOc1. O/R

Pressure on Russian assets also increased after a Berlin hospital said it had found indications of poisoning in Kremlin critic Alexei Navalny, who is in a medically-induced coma.

The Kremlin said it saw no reason for now to investigate the circumstances around his illness, while Russia's parliament launched a probe to see whether foreign forces were behind the alleged poisoning.

"The rouble is falling more than its peers amid a drop in the U.S. market, news from Belarus that its army is ready to intervene and the poisoning of Navalny," said Iskander Lutsko, chief investment strategist at ITI Capital.

A recovery in the rouble is unlikely before political risks fade, said Elena Kozhukhova, an analyst at Veles Capital, an investment firm.

The Belarusian rouble tumbled to 3.07 per euro EURBYN=, a record low, prompting the central bank to order an uninterrupted supply of cash FX to exchange offices. Against the dollar, it approached a record low hit in March <BYN=>, losing nearly 2% on the day.

Losses mounted after a central bank official told Reuters there were no plans to introduce capital controls to prevent currency depreciation.

Russia's dollar-denominated RTS equity index .IRTS slipped 1.1% to 1,267.2 points and the rouble-based MOEX Russian index .IMOEXfinished the day nearly flat at 3,029.1 points.

For Russian equities guide see RU/EQUITY

For Russian treasury bonds see 0#RUTSY=MM

Russia roublehttps://tmsnrt.rs/34ynuoS

(Reporting by Gabrielle Tétrault-Farber, Andrey Ostroukh and Sujata Rao Editing by David Holmes/Mark Heinrich/David Gregorio)

((Gabrielle.Tetrault-Farber@thomsonreuters.com;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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