The Russian rouble is getting slammed amid US sanctions

Russian
President Vladimir Putin on Monday denied his government
interfered in the US presidential election in
2016.
Grigory
Dukor/Reuters

The Russian
rouble plummeted to its lowest level against the dollar since
2016 on Thursday as Washington prepares to penalize Moscow for a
chemical attack in the UK earlier this year. 

The rouble was down 0.8% to 66.1101 against the dollar at
9:45 a.m. ET. It shed as much as 5% versus the dollar after
the the State Department said it would impose new sanctions
against Moscow for the March poisoning of former Russian
spy Sergei Skripal and his daughter.

US and European allies have publicly blamed the Kremlin for
attempting to kill the two in the British town of Salisbury
using a Novichok nerve agent, a claim Russian President Vladimir
Putin has denied. 

The sanctions, set to go into effect later this month, target
Russia’s defense sector and could prevent hundreds of millions of
dollars worth of equipment from reaching state-owned companies. A
second round of tougher sanctions could be imposed in 90 days if
Moscow does not meet a list of demands, the State Department
said.

“Investors will likely ignore the Russian economic fundamentals
in the weeks ahead and focus on political developments,”
said Hussein Sayed, chief market strategist at FXTM. 

Turbulence in the oil market is also putting pressure on the
currency, analysts said. Crude prices fell to a seven-week low
Wednesday after data showed a smaller-than-expected drawdown in
US stockpiles and as the US and China rolled out additional
tariffs against one another, including on oil products. 

The rouble is down 14.25% versus the dollar this year. 

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