On Friday, there was a more than 6% fall in the Russian ruble against the US dollar, which brought it to its lowest level in 10 days. Meanwhile, Russian stock indexes were under pressure, as Gazprom shares continued their slide, after the company’s announcement to not pay dividends to shareholders this year.

Ruble falls

There was a 5.9% decline recorded in the Russian Ruble as of 1019 GMT against the US dollar, which brought it to 54.50. Earlier, the Russian currency had reached its lowest level of 54.9250, which it had not seen since June 21^st. On Wednesday, it had managed to scale the highest level it had experienced in over seven years.

As far as against the euro is concerned, the Russian ruble did not fare much better as it was trading at 56.85, after a drop of 5.9%. Market analysts said that the possibility of the Russian currency strengthening past the 50 mark against the greenback has now eased, even though it still did have the support of high commodity prices.

This year, the ruble has managed to outperform all other major currencies in the world to deliver the best performance. This is because it received a boost from the measures that had been implemented by Russian authorities for protecting the country’s financial system from the sanctions imposed by Western nations over its invasion of Ukraine in February. These measures include not permitting people in Russia to withdraw their forex currency holdings.

Problems with the ruble

The problem is that the ruble’s strengthening has become a bit of a problem amongst companies that are export-focused as well as officials. This is because a strong Russian currency eats into the income that the country earns from selling commodities and other items abroad in exchange for euros and dollars.

Analysts said that the ruble had also come down because of expectations that authorities could decide to make some foreign currency interventions. This was meant for stalling the ruble’s strengthening and have already put it under pressure.

Gazprom’s fallout

The dividend decisions of Russian energy giants Gazprom and Rosneft were opposite of each other and this prompted shares of both companies to follow different courses because of the response from investors. There was a 5.5% drop in shares of Gazprom, which continued the fall it had seen in the last trading session.

This occurred after the gas giant announced that it had decided not to pay dividends to its shareholders on the results of the previous year. It is a first for the company to have done so in the last two decades. As for Rosneft, it shares saw a rise of 4.5%, after the company had announced dividend payments after the trading session closed on Thursday.

Analysts said that the Russian markets had a few reason for optimism. They said that the commodity sector would continue to feel the pressure and the ruble was also expected to lose some value. As for stock indexes, they had a mixed performance for the day.