By Alexander Marrow
MOSCOW (Reuters) – The rouble recovered from two months lows and Russian stocks pared losses on Wednesday after earlier plunges triggered by President Vladimir Putin’s move to order Russia’s first military mobilisation since World War Two.
Putin said he had signed a decree on partial mobilisation, significantly escalating what Russia calls its “special military operation” in Ukraine, and warned Moscow would respond with the might of all its vast arsenal if the West continued with what he called its “nuclear blackmail”.
By 0859 GMT, the rouble was 0.2% stronger at 60.50 to the dollar, having dropped as far as 62.7975, its weakest point since July 7.
It reversed early losses to trade up 1.2% at 59.87 to the euro and rise 1.2% against the yuan to 8.546.
The rouble has been the world’s best-performing currency this year, buoyed by emergency capital controls rolled out by the central bank in a bid to halt a mass sell-off.
Putin’s move wrought havoc on global markets too, with investors flocking to safe-haven assets and sterling hitting a new 37-year low against the dollar.
STOCKS EXTEND SLUMP
Russian stock indexes fell, extending a slide that began on Tuesday as rumours of possible mobilisation spread, with energy giants Rosneft and Gazprom at one point losing around 12% each, before settling at around 4.7% and 2.6% lower respectively.
The benchmark rouble-based MOEX index hit its lowest point since Feb. 24, the day Russia sent tens of thousands of troops into Ukraine, before paring some losses.
Tinkoff Investments analysts said it was the biggest MOEX drop since Feb. 24, when the index lost more than 30% in one day.
The MOEX index was down 2.4% at 2,162.4 points, after earlier hitting a low of 2,002.73 points. The dollar-denominated RTS index was down 2.6% to 1,124.5 points, after earlier reaching its lowest point since April 27.
(Reporting by Alexander Marrow Editing by Mark Heinrich and Mark Potter)
