Russian markets tumble as failed peace talks hit ruble
The Russian market is experiencing a collapse. On Wednesday, following news of the suspension of peace negotiations concerning Ukraine, the ruble's exchange rate against the dollar fell by 2.20%, dropping below $0.12.
The Russian currency and stock market are seeing significant declines as a reaction to the failed peace talks regarding Ukraine. By 5:30 AM ET, the dollar's exchange rate on the Forex market had risen by 1.5% to 82.71 rubles, and on the Russian interbank market, according to Reuters data, it even increased to 83.1 rubles, which is the highest level in a week. In the afternoon, this trend intensified.
The euro increased against the ruble by 2.2%, reaching 94.5 rubles, while the yuan's exchange rate on the Moscow Exchange jumped by 2% to 11.35 rubles, also setting a weekly high. Foreign currencies are gaining value against the Russian ruble, indicating a significant weakening of the ruble.
Collapse on the Russian stock exchange
The Moscow Exchange Index, which had neared the 3000-point level the previous evening, dropped to 2900 points at the start of Wednesday's trading. The stocks of Russia's largest companies saw noticeable declines - "Gazprom" lost 3.2%, Sberbank 1.5%, VTB 3.1%, and "Rosneft" 2.9%.
Shares of companies like "Aeroflot," NLMK, MMK, and "Alrosa" lost over 3% of their value. Freedom Finance Global analyst Vladimir Chernov states, "The negative dynamic is associated with geopolitics, as the planned talks in London regarding the settlement of the military conflict in Eastern Europe were canceled."
Experts predict that by the end of the week, the ruble will likely continue to weaken, and the stock market will continue to decline. The dollar exchange rate could rise to 85-86 rubles, and the Moscow Exchange Index could fall to 2860 points.
Reasons for the suspension of peace talks
After Volodymyr Zelensky publicly refused to recognize Crimea as Russian, as demanded by the United States in the peace plan, Marco Rubio, the head of the State Department, and the foreign ministers of France and Germany - Jean-Noël Barrot and Annalena Baerbock - withdrew from the negotiations.
As a result, the meeting will take place at the expert level instead of the ministerial level, as informed by the UK's Foreign Office. U.S. Vice President J.D. Vance stated that the United States would pull out of the negotiation process if Moscow and Kyiv do not accept the American plan.
The State Department fears that Ukraine may return to earlier hardline positions, which would prevent a breakthrough in the negotiations, according to Reuters sources familiar with the situation. According to these sources, the issue of easing sanctions remains unresolved — unlike the U.S., European countries are not ready for such a step, as their "red line" still remains the recognition of Crimea's annexation.
