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Rouble weakens amid Russia sanctions threat ahead of Biden-Putin talks -Breaking

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© Reuters. FILEPHOTO: This illustration photo shows Russian roubles coins. It was taken March 25, 2021. REUTERS/Maxim Shemetov/Illustration/File Photo

Alexander Marrow and Katya Glubkova

MOSCOW (Reuters] – On Tuesday the rouble fell marginally as investors focused on a call between Russian President Vladimir Putin, and Joe Biden, later that day. As the threats of additional sanctions against Moscow lingered, the video conference was dominated by concerns about the video call.

Biden will inform Putin that Russia’s banks and financial institutions could face the harshest economic sanctions if the country invades Ukraine. This is according to U.S. officials.

The rouble, which had gained against the greenback in earlier sessions, was 0.2% lower against the dollar by 1404 GMT. The euro rose 0.2% to 83.570.

As geopolitical tensions escalate, yields on OFZ 10-year benchmark Treasury bonds of the government were put under increasing pressure.

Kyiv and West claim that Russia has begun to build troops in Ukraine. Russia says that it does not have such plans, and it will move its troops wherever it pleases.

According to the Kremlin, Tuesday’s statement stated that they did not anticipate a breakthrough and asked people for calm in spite of mounting tensions.

Latvia suggested that Russia be disconnected from SWIFT, the international payment system used worldwide by banks. This would worsen Russia’s inflation problems, according to Max Castle, fixed income portfolio manager at Mediolanum Irish Operations.

He stated that such a move would lead to a serious economic decline in Russia and would not be affordable for Putin. However, this does not mean that Putin won’t make more moves or become more aggressive.

SWIFT has been a threat over the past few years. Andrey Kostin (chief executive of Russia’s second largest bank VTB), stated that such an action would be similar to declaring war.

According to Reuters sources, sanctions on Putin’s inner circle were discussed. However, no decisions had been taken.

According to another source, sanctions that would prevent roubles from being converted into dollars or other currencies were also possible. This idea was rejected by Sberbank German Gref’s CEO.

Sova Capital suggested that sanctions could form part of an American strategy to discourage Russia.

BCS Global Markets however stated that US threats made on the day of the summit could have inflamed, rather than defused tensions. It also eroded any hope of reaching common ground.

The price of oil, which is Russia’s primary export, rose 2% to $74.55 per barrel. This supports Russian stock indexes.

RTS was up 0.1% at 1,623.8 points. With 3,838.0 point, the MOEX Russian rouble index was 0.7% lower.

For Russian equities guide see

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