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Russian rouble barely changed despite U.S. sanction threat

The Russian rouble fluctuated little in relation to the dollar on Tuesday, despite President Donald Trump's harsh criticism of Russian president Vladimir Putin and threats of new U.S.

According to LSEG, based on quotes over the counter, by 0925 GMT the rouble had risen 0.4%, or 78.15 dollars per rouble. Since the beginning of the year, the Russian currency has gained 45% versus the dollar.

Trump, who has been frustrated with Russian President Vladimir Putin for some time, said Tuesday that he approved the sending of defensive arms from the United States to Ukraine and is considering additional sanctions against Moscow.

A bill introduced in the Senate would penalize countries that do business with Moscow by imposing tariffs of 500% on nations that purchase Russian oil, gas and uranium, among other exports. U.S. sanctions were imposed in November last year, which had a major impact on the Russian currency.

Bogdan Zvarich, a banker at PSB, said that despite the worsening geopolitical climate, the rouble would continue to be supported by the demand for assets denominated in roubles, which, if nothing else, will restrain the weakening of the rouble.

Demand for rouble assets is fueled by high interest rates in Russia's economy. Increased forex sales this month by the central banks as well as oil prices are also supporting the currency.

The rouble, which is the most commonly traded currency in Russia, was unchanged at 10,85 per yuan at the Moscow Stock Exchange. The central bank's forex interventions are made in yuan. Reporting by Gleb Brynski, Editing by Peter Graff

(source: Reuters)