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Russia. Wagner rebellion – the weakest ruble since the end of March 2022

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The Russian ruble hit nearly 15-month lows against the US dollar on Monday morning. The Reuters agency wrote that this was the first market reaction to the armed rebellion of the owner of the mercenary Wagner Group, Yevgeny Prigozhin, which lasted about 24 hours.

On Monday, around 6.15 am Polish time, the dollar increased by 2.1 percent, to 86.50 rubles against the American currency. Previously, this pair was even observed at the level of 87.2300, the highest since the end of March 2022.

The ruble also lost 2.2 percent. against the euro and fell by 2.1 percent. against the yuan.

The situation in Russia

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On Saturday, the head of the Wagner Group – a private Russian military company – Yevgeny Prigozhin led an armed rebellion in Russia. The forces under his command departed from Ukraine in the “March of Justice”, the goal of which was to be Moscow. The Wagnerian troops approached the Russian capital to a distance of 200 kilometers. Ultimately, as a result of negotiations with Vladimir Putinmediated by the Belarusian dictator Alankandr Lukasheka, Prigozhin held off the assault and agreed to go to Belarusto avoid bloodshed, he said.

Read also: Wagnerian revolt in Russia. What about the power of Vladimir Putin?

For the markets, this means a situation of increased uncertainty and risk, which may favor the so-called safe havens like the dollar or the Japanese yen. Raw materials markets, of which Russia is a large exporter, may also react.

“It’s definitely going to take a day or two to see what happens, but if uncertainty around the Russian authorities persists, investors may be heading to safe havens,” said Gennadiy Goldberg of TD Securities.

“The escalation of the internal military conflict in the coming days could boost demand for oil stocks, at least temporarily,” said S&P Global Commodity’s chief geopolitical adviser Paul Sheldon.

Main photo source: EPA/MAXIM SHIPENKOV

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