MOSCOW: The Russian rouble fell past 73 versus the dollar on Tuesday, taking a hit from mounting geopolitical concerns related to the Russian military buildup near Ukraine and Russia's anti-satellite missile test.
At 1250 GMT, the rouble shed 1.1% to 73.33 against the dollar, its weakest since Sept. 21 apart from a seconds-long drop on the Moscow Exchange on Oct. 22 that was likely caused by a trading error.
Versus the euro, the rouble shed 1% to 83.18.
After hitting its strongest level since mid-2020 of 69.21 against the dollar in late October, the rouble came under selling pressure last week after a Bloomberg report said that U.S. officials had told EU counterparts about concerns over possible Russian military intervention in Ukraine.
Russia's risk measured by five-year credit default swaps that reflect the cost of insuring exposure to sovereign debt jumped to 99.2 basis points, their highest since April 22.
The Russian troop movements near the Ukrainian border have spurred fears of a possible attack. But Moscow has dismissed such suggestions as inflammatory and complained about increasing activity in the region by the NATO alliance.
Russia also came under the spotlight after it conducted an anti-satellite missile test that, as U.S. officials said, generated a debris field in low-Earth orbit that will pose a hazard to space activities for years.
Rouble recovers from steep losses, stocks up
Russia denied allegations by the United States, Britain and NATO that the test had been dangerous for orbiting spacecraft.
In the short term, the rouble may remain volatile in the range of 72-73 versus the dollar but it could win back the recent losses quickly if the political background stabilises, said Dmitry Polevoy, head of investment at Locko Invest.
The rouble is set to receive support from month-end taxes that boosts demand for the currency as well as from expectations of more interest rates hikes by the central bank.
Russian stock indexes gave up earlier gains and fell.
The dollar-denominated RTS index declined 1.2% to 1,770.8 points. The rouble-based MOEX Russian index was 0.5% lower at 4,113.9 points.