Ruble steadies, Russian stocks slip after Ukraine dam breach

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The ruble hovered around 81 against the dollar on Tuesday, showing limited reaction to the breaching of a major Soviet-era dam in the Russian-controlled part of southern Ukraine, while Russian stocks fell to near two-week lows.

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Floodwaters surged out across the war zone after what both Ukraine and Russia said was an intentional attack by the other’s forces.

By 0711 GMT, the ruble was 0.1 percent stronger against the dollar at 80.92 and was unchanged at 86.77 versus the euro. It had firmed 0.2 percent to 11.35 against the yuan.

Brent crude oil, a global benchmark for Russia’s main export had hit a more than one-month high in the previous session, supporting the ruble. On Tuesday, it was down 1.5 percent at $75.58 a barrel.

The ruble also drew support from higher FX sales by Russian firms that are accumulating cash for dividend payments and an upcoming increase in FX sales by the finance ministry.

“But there is not much to be happy about - such steps mean the budget is short of oil and gas revenues,” said Alor Broker.

The market is looking ahead to Friday, when the central bank is widely expected to keep rates on hold at 7.5 percent.

Russian stocks opened lower on Tuesday.

The dollar-denominated RTS index was down 1.8 percent at 1,029.5 points, a two-week low. The ruble-based MOEX Russian index was 1.9 percent lower at 2,641.9 points.

“There are no signs of panic yet, however, while dividend payments and announcements are continuing to provide support, so after a refreshing correction, the market could well reach new highs this week,” Sinara Investment Bank said.

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