The Russian rouble sank to a more than 15-month low on Tuesday before paring losses after Russian President Vladimir Putin ordered the deployment of troops to two breakaway regions in eastern Ukraine after recognising them as an independent.
The rouble suffered its biggest one-day drop since the outbreak of the COVID-19 pandemic on Monday, plunging on Western fears that Putin’s move to recognise the two regions as independent and send in forces to “keep the peace” may presage a major war.
At 0613 GMT, the rouble was 0.2% stronger against the dollar at 79.64 , recovering slightly after sliding to 80.5825 in early trade, its weakest point since Nov. 2, 2020.
It had gained 0.2% to trade at 90.00 versus the euro, after earlier hitting 90.95, its weakest since April 2021.
Russia has repeatedly rejected Western assertions that it may be planning to invade neighbouring Ukraine, but its assets have been hammered by fears of a military conflict that would almost certainly trigger sweeping new Western sanctions against Moscow.
The United States said it would halt U.S. business activity in the breakaway regions and ban the import of all goods from those areas, but said those measures were separate from sanctions Washington and its allies have prepared should Russia launch a full-scale invasion of Ukraine.
Coordinated sanctions will be announced during the day on Tuesday. Possible measures could target major financial institutions, blocking Russia’s access to global electronic supplies or steps designed to curb Russian energy firms.