Russia’s ruble hit its lowest level against the dollar in about 15 months on Monday, a sign of concern in financial markets over what could come next for the country following the rebellion against the government by the Wagner mercenary group.
The Russian currency (ticker:
RUBUSD
) ruble fell to $0.0115, its lowest value since April last year, when the country was grappling with sanctions imposed in response to the invasion of Ukraine, before clawing back up to $0.0118.
Investors are trying to make sense of the turbulence that struck Russia over the weekend. Yevgeny Prigozhin, chief of the Wagner Group, ordered what he called a “march for justice” on Friday in response to what he described as an attack on his forces by the Russian military, seizing control of a military command in Rostov-on-Don in southern Russia.
A convoy of soldiers began to make its way toward Moscow, only to be called off mid-Saturday after Belarussian dictator Aleksander Lukashenko brokered an agreement between Prigozhin and Russian President Vladimir Putin.
Fighting that could have led to a civil war has been avoided, but the moves represent a major challenge to Putin’s power.
The uprising over the weekend “has dealt a heavy blow to President Putin and exposed cracks in the regime,” Liam Peach, an emerging-markets economist at Capital Economics, wrote on Monday. “There are a lot of unknowns about how things will play out at this point.”
In remarks at the White House, President Joe Biden offered a similar view, saying it is “still too early to reach a definitive conclusion about where this is going.”
Russia’s MOEX index (IMOEX), a benchmark for Russian stocks, and the dollar-denominated RTS index (IRTS), closed down 1.4% and 1.8%, respectively. Stock in Sberbank (SBER), a big Russian bank, fell 1.5%.
Sanctions against Russia mean investors can’t reflect their views on Russian stocks or sectors using exchange-traded funds. In December, VanEck suspended its Russia ETFs, including the VanEck Russia Small-Cap ETF (RSXJ), in preparation for liquidating them, following moves by major ETF issuers such as BlackRock to liquidate their funds in mid-2022.
Write to Karishma Vanjani at karishma.vanjani@dowjones.com.
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