The heat and thick smoke cloaking Moscow are starting to have an effect on Russia’s currency, as traders flee the city, Bloomberg reports today. The ruble fell by 0.5% against the dollar over the last week.
The nation’s worst heat wave on record has led to fewer fixed-income trades, according to Moscow investment bank IFC Metropol. Trading on the Micex stock index dropped to 21.6 billion rubles on Aug. 6, from 68.4 billion rubles on the same date last year, Bloomberg data show…
…”Traders are going out of the country and are closing their ruble long positions before they get out,” said Denis Korshilov, head of foreign-exchange trading in Moscow at Citigroup Inc. “There’s very low liquidity and volumes on the market.”
The heat has spurred the worst drought in five decades and prompted Prime Minister Vladimir Putin to declare a state of emergency in 28 Russian regions. Banks such as Deutsche Bank AG have sent home non-essential staff and advised others to work from home via remote connections.