The Russian ruble experienced a significant drop of almost 3% at the beginning of trade on Monday. This decline was a direct response to the recent mutiny attempted by units of a private military company over the weekend.
As a result of this unrest, the currency weakened to below 87 rubles to the US dollar, a level that hadn’t been seen since March 2022. Additionally, the euro increased by 2.5% in comparison to Friday’s level, reaching an exchange rate of over 95 rubles. This was the highest exchange rate the euro had achieved since April of the previous year.
Investors are currently in the process of analyzing and coming to terms with the events that unfolded over the weekend. The insurrection, led by Evgeny Prigozhin’s private military company called Wagner, commenced on Friday evening and took place across the country.
Prigozhin’s units managed to gain control of various military and administrative sites in the southern city of Rostov-on-Don and began advancing towards Moscow. However, Wagner ultimately abandoned its progress after failing to secure the support of regular Russian army units. Eventually, an agreement was reached between Wagner and the authorities.
It is important to note that the ruble has faced pressure in recent weeks due to a combination of lower oil prices and Western sanctions. These sanctions have limited foreign investments and restricted the supply of foreign currency from exporters.
In conclusion, the Russian ruble’s drop in value can be attributed to both the aborted mutiny by Wagner and the ongoing economic challenges faced by the country. The impact of these events on the national currency will likely continue to be monitored closely by investors and economists alike.
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