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As tighter lockdowns threaten oil demand, the Russian ruble feels the pressure

November 2, 2020, 11:11 AM UTC

The ruble tumbled past 80 against the dollar, trading at its weakest level since March, as tighter lockdowns in Europe threatened demand for crude, Russia’s key export earner.

The ruble has been under pressure for months amid fears of new sanctions, low oil prices and rising coronavirus cases. Concern that Joe Biden may crack down on Russia should he win this week’s U.S. presidential vote has contributed to the currency’s more than 7% slide in the past three months.

Crude sank to a five-month low as a continued increase in Libyan production coincided with a wave of new restrictions to combat the virus. Swathes of Europe enter lockdown this week, with England joining nations from Austria to Portugal taking tougher action to counter virus infections.

Despite this year’s currency slump, foreign investors still hold more than 3 trillion rubles ($37 billion) of domestic government bonds, close to a record high. The Russian currency is undervalued by at least 10%, Amundi money manager Yerlan Syzdykov said at an investment forum in Moscow on Friday.

Russia’s currency fell as much as 1.3% to 80.5575 per dollar, close to the four-year low it reached at the peak of the market rout in March.