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Ruble Falls Further, Russian Officials Seek To Calm Nerves

"To our mind, some time is needed for the adaptation of the economy's financial sector to the changed external conditions," Russian Central Bank chief Elvira Nabiullina said. (file photo)

The Russian ruble is falling for a second straight day following the imposition of new U.S. sanctions, while the Central Bank chief and other officials are seeking to calm investors in the wake of a big sell-off in shares of Russian companies a day earlier.

The ruble was down by more than 4.5 percent early on April 10, trading at more than 63 to the dollar for the first time since December 2016.

The euro was worth more than 78 rubles for the first time since early 2016, during a recession caused largely by low world oil prices and aggravated by previous Western sanctions.

The ruble gained some ground against both currencies later in the day, but was still at its lowest since December 2016 against the dollar at about 62 -- a decline of more than 2 percent.

The declines came a day after the ruble suffered its biggest single-day drop in more than three years and the price of stocks in major Russian companies fell.

Deputy Prime Minister Arkady Dvorkovich acknowledged "uncertainty" among investors in the wake of the sanctions announced by the U.S. Treasury Department on April 6.

The U.S. measures targeted more than two dozen tycoons, companies, officials, and political figures seen as close to President Vladimir Putin -- part of an attempt to punish Russia for what the treasury secretary called its "malign activity around the globe."

"The main thing right now is to minimize uncertainty while securing stable functioning of the companies where hundreds of thousands of people work.... If necessary we will ensure the preservation of stable functioning." Dvorkovich told an economic forum in Moscow. He did not explain in detail how the government might achieve that goal.

"Share prices are a secondary thing in this case," Dvorkovich said, a statement that appeared aimed to signal to everyday Russians that their well-being is more important to the government than the price of shares in companies controlled by wealthy tycoons.

Speaking at the same forum, Central Bank Governor Elvira Nabiullina said that Russia's financial stability did not appear to be at risk for now, and that the bank had a wide array of tools with which to address the effects of the sanctions, which she suggested would not be long-lasting.

"Friday's events [the U.S. sanctions] are surely causing the market correction that we are now seeing. As usual in such cases, the market becomes volatile during first days," Nabiullina said. "To our mind, some time is needed for the adaptation of the economy's financial sector to the changed external conditions."

Finance Minister Anton Siluanov said that Russian authorities "will implement all the required tools to mitigate the effects of the new sanctions and any other external events with potentially [adverse effects] on businesses and the financial market."

The sanctions freeze any assets that those targeted have in U.S. jurisdictions and bar Americans from doing business with them.

The Russians added to U.S. sanctions lists included some of the most prominent officials and magnates to be targeted by the United States in its efforts to punish Moscow for actions including its alleged meddling in the 2016 U.S. presidential election.

They include well-connected tycoon Oleg Deripaska, whose companies suffered sharp losses on April 6, as well as state-controlled gas giant Gazprom CEO Aleksei Miller, National Guard chief and former Putin bodyguard Viktor Zolotov, and the secretary of Putin's Security Council, Nikolai Patrushev.

The new sanctions come less than one month after Putin won a six-year fourth presidential term in a landslide vote that emphasized his dominance of the country.

He has vowed to improve living conditions and will be under pressure to keep the economy -- which is forecast to grow by 2 percent in 2018 after emerging from a two-year recession and growing by 1.5 percent in 2017 -- from flagging.

The Russian newspaper Vedomosti reported on April 10 that the government is considering setting up offshore-style zones in the Western exclave of Kaliningrad and the Pacific coast city of Vladivostok in an effort to shelter the tycoons hit by the U.S. sanctions and return Russian capital to the country.

With reporting by Reuters, AP, TASS, and Interfax
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