The Russian rouble took another dive yesterday to hit its lowest point in over a year after a fresh round of US sanctions on individuals close to Russian President Vladimir Putin rattled markets.
The rouble fell nearly four per cent against the US dollar, with one dollar buying 63.9 roubles at its peak, following on from a four per cent drop at the start of the week.
Diplomatic relations between Russia and the West have hit a recent low point after an alleged chemical weapons attack by the Syrian government, an ally of Putin.
Last night Russia vetoed a US resolution at the United Nations to create a new expert body to determine responsibility for the Syria chemical weapons attacks.
The attack, which killed dozens of civilians, followed an attack on a former spy, Sergei Skripal, in Salisbury which the government says was ordered by Russia.
His daughter, Yulia Skripal, was discharged from hospital yesterday.
Prime Minister Theresa May yesterday spoke to both US President Donald Trump and French President Emmanuel Macron, agreeing that the “international community needed to respond” to the Syrian attack, “if confirmed”, according to an account of the call from Downing Street.
Companies with Russian ties scrambled to contain the damage, with some of Russias biggest firms plunged into crisis. Rusal, owned by Russian aluminium tycoon and Putin ally Oleg Deripaska, was one of the worst affected.
Dollar-denominated bonds for the firm fell to record lows, while Hong Kong-listed shares in Rusal dropped 8.7 per cent after halving in value the previous day.
The London Metal Exchange last night said it would impose a “temporary conditional suspension” on Rusal metal being delivered into its warehouses after 17 April.
Glencore has also cancelled a deal to swap its 8.75 per cent stake in Rusal for shares in En+, the London-listed energy firm also linked to Deripaska.
It said it will review other contracts, but added they are not “financially material”.
Rio Tinto, another of Londons blue-chip commodities firms, said it is reviewing its ties with Rusal, according to Reuters.
Websites for Rusal and En+ were both not functioning last night.
Russian stock markets were mixed thanks to a boost from the fall in the value of the rouble.
The Moscow Exchanges dollar-denominated RTS index fell by 0.38 per cent, but the rouble-denominated Moex jumped by 3.9 per cent.