Continued Decline of the Russian Ruble Following U.S. Sanctions

The value of the Russian ruble has decreased for the second consecutive day following the imposition of new sanctions by the United States. The ruble's fall comes after the head of the Central Bank and other government officials attempted to calm investors by selling shares of Russian companies. On April 10, the value of the ruble dropped by 4.5%, marking the first time since December 2016 that the value of one dollar reached 63 rubles. The euro also reached a price of 78 rubles for the first time since early 2016, during the economic downturn caused by the global decline in oil prices and the increase in previous Western sanctions. By the end of the same day, the ruble managed to regain some of its value against the mentioned currencies, yet it still reached its lowest value since December 2016, with one U.S. dollar valued at 62 rubles. This change occurred one day after the ruble experienced its largest single-day decline in three years, and stock prices in most Russian companies fell. Deputy Prime Minister Arkady Dvorkovich stated that the sanctions announced by the U.S. Treasury have led to widespread 'uncertainty' among investors. The U.S. actions target over twenty industrial and commercial giants, companies, officials, and political figures close to President Vladimir Putin. The new sanctions are imposed under a law known as 'CATSA,' which was enacted due to allegations against Moscow regarding the annexation of Crimea, interventions in Syria, and interference in U.S. elections. Russia has denied interfering in U.S. elections and claims it entered the conflict in Syria at the request of the central government to 'fight terrorism.' Dvorkovich, speaking at an economic forum in Moscow, said, 'The most important issue now is to minimize uncertainty by guaranteeing the performance of companies that employ hundreds of thousands of people... We will ensure the sustainability of this performance if necessary.' He did not specify how the government could achieve this goal. Dvorkovich stated, 'Stock prices are a secondary issue here.' This statement seems aimed at showing ordinary Russian citizens that their welfare is more important to the government than stock prices in companies controlled by economic giants. Elvira Nabiullina, the head of the Central Bank, said at the same meeting that Russia's financial stability is not currently at risk and that the bank has various tools to assess the impact of the sanctions, which she believes will not be long-term. Nabiullina stated, 'The events of Friday (U.S. sanctions) have certainly caused changes in the market that we are witnessing today. As usual, in such cases, the market situation becomes unstable in the first days.' Anton Siluanov, the Minister of Finance, also stated that Russian officials are prepared and will implement 'all necessary tools to mitigate the impacts of the new sanctions or any other external events with potential effects on enterprises and the financial market.' Those added to the U.S. sanctions list include some of the most prominent officials and figures. These sanctions will block the assets and properties of these individuals and companies in the U.S., and American citizens will also be prohibited from cooperating and trading with them. Among those targeted by the sanctions are the head of the gas giant Gazprom and Oleg Deripaska, an aluminum industry tycoon. The new sanctions were announced less than a month after Putin won the elections and took office for the fourth time. In this context, Russia has called the U.S. sanctions 'unacceptable.'