In Russia, which is in the grip of Western economic sanctions, the ruble fell to a seven-month low against the dollar on the first trading day of the week, while stocks fell 4 percent.
The Russian currency, the ruble, tumbled its biggest single-day drop since July on fears that sanctions on oil would hit the country’s export revenues.
The historic decline also played a role in Russian President Vladimir Putin’s fueling fears of pressuring Belarus to join a ground offensive that would open a new front against Ukraine.
The ruble also lost 3.8% against the Euro, trading at a seven-month low of 71.71. Against the yuan, it lost 3.9% to 9.64, its weakest level since early July.
The ruble has lost nearly 10% of its value in December. Speaking to Reuters, Alfa Capital Analyst Yulia Melnikova said that the weakening was due to concerns that the oil embargo would reduce Russia’s oil export revenues and increase the budget deficit.
European Union leaders passed the ninth package of sanctions against Moscow last week, blacklisting nearly 200 more people and banning investment in Russia’s mining sector, among others.
The ruble remains the world’s best-performing currency this year, fueled by the initial crash in imports as a result of Western sanctions over capital controls and Russia’s actions in Ukraine, and backed by multiple foreign companies shutting down their operations in the country.
Russian stocks also crashed
Analysts say month-end tax payments, as exporters convert foreign currency earnings into rubles to pay off local liabilities, will provide support for the ruble, but the currency could settle into a new, weaker range, breaking the 65 mark for the first time since May.
The dollar-denominated RTS index fell 4% to 996.9 points, the lowest in more than two months. Ruble-based MOEX Russia index remained flat with 2,132.2 points.