Moscow Exchange index sinks to its lowest in 20 months

The Moscow Exchange dropped by 1.7% to 2,424 points as of 1400 GMT, marking its lowest level in 20 months, because of ongoing geopolitical tensions in Russia and uncertainty surrounding the Russian Central Bank’s monetary policy decisions.

Tensions between Russia and Western countries, along with sanctions, continue to weigh heavily on the nation’s markets as E.U. imposed new sanctions on Russia following the U.S.

While the Russian Central Bank’s tight monetary policies have yet to yield results in combating inflation, uncertainties regarding decisions to be made during the bank’s December 20 meeting have negatively impacted financial indicators.

According to Anadolu Agency, the ruble weakened by approximately 0.6% against the U.S. dollar, pushing the dollar/ruble exchange rate to 103.85. The dollar-denominated RTS index also fell by 1.7%, settling at 744 points.

On Oct. 25, the Russian Central Bank raised its policy rate by 200 basis points to 21%, the highest level on record.

Analysts suggest that the bank might implement another interest rate hike during its December 20 meeting, given the lack of a decline in inflation.