By JAMES ELLINGWORTH
MOSCOW (AP) — The ruble plunged for the second day in a row on Tuesday following fresh U.S. sanctions against Russia.
The Russian currency traded above 63 to the dollar for the first time since Dec. 2016, down by more than 4.5 percent, but has since recovered to 62.5. The euro briefly went over 78 rubles for the first time since early 2016, when historically low oil prices were hurting the Russian economy.
The sanctions introduced Friday against numerous Russian businessmen, officials and companies have caused sharp share price drops for sanctioned companies — most notably aluminum producer Rusal — but also the wider stock market, particularly banks which may be exposed to the sanctioned firms. Forbes magazine's Russian edition estimated that Russian billionaires lost a total of $12 billion on Monday alone.
Russian Deputy Prime Minister Arkady Dvorkovich said planned government support for sanction-hit companies will focus on stabilizing them to avoid job losses, rather than propping up share prices.
"The main thing right now is to minimize uncertainty while securing stable functioning of the companies, where hundreds of thousands of people work," he told an economic forum in Moscow. "If necessary we will ensure the preservation of stable functioning ... Share prices are a secondary thing in this case."
He didn't provide details of how the measures could work.
The head of the Central Bank of Russia said she didn't view Russia's economy as financially unstable.
"In our view, there are no such risks now and certainly no need to take systemic measures, but we will keep track of the situation," Elvira Nabiullina said.
On the Moscow exchange, the main MOEX index was up more than 2 percent in morning trading after taking a heavy hit Monday, though the dollar-denominated RTS index was down 2 percent.
Rusal shares have dropped sharply since the sanctions were announced, falling by 50 percent in Hong Kong trading Monday, and the company has warned it may technically default.
On Tuesday, the chief executive of commodities giant Glencore, Ivan Glasenberg, left the board of Rusal, Glencore said.
Glencore also said it "will not proceed ... at this time" with a planned deal to swap its 8.75 percent stake in Rusal for a stake in billionaire Oleg Deripaska's holding company EN+ Group.
Glencore, which purchases large quantities of aluminum from Rusal, added it is "still evaluating the position under its contracts with Rusal, but notes that these contracts are not financially material to Glencore."
The U.S. Treasury Department on Friday announced sanctions against seven leading Russian businessmen, 17 officials and a dozen Russian companies.
Besides Deripaska, targets included Alexei Miller, the head of state natural gas giant Gazprom, and Andrey Kostin, the head of the state-controlled VTB Bank, which is Russia's second-largest.
There was also a place on the list for Kirill Shamalov, who is reportedly Putin's son-in-law, married to his daughter Katerina Tikhonova — although neither Putin nor the Kremlin has acknowledged that she is his daughter.
The sanctions freeze any assets that those targeted have in U.S. jurisdictions and bar Americans from doing business with them.
Subscribe to Closing Arguments
Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.
Additional Reads
-
California unemployment rate holds steady in March April 19, 2024 -
