Russian Ruble Collapses After Trump's New Ultimatum

The daily rate of the ruble's decline has become a record this year.

The Russian ruble fell sharply in value on Monday following statements by U.S. President Donald Trump, who said he was cutting short a 50-day ultimatum to Vladimir Putin on Ukraine and waiting for the Kremlin's decision within the next 10-12 days, The Moscow Times reported.

The yuan exchange rate jumped 2.55% to 11.3450 rubles at the end of trading on the Moscow Exchange, and during the session reached 11.36, the highest since May 5.

On forex, the dollar was up 4% to 82.92 rubles, while the euro was up 1.3% to 94.38 rubles.

On the Russian over-the-counter market, the U.S. currency rose 2.4% on the day to 81.11 rubles, while the European currency broke through the 94-ruble mark for the first time since May 9.

The daily pace of the ruble's decline was a record this year. Trump's rhetoric "increases geopolitical risks, including raising the threat of new anti-Russian sanctions," notes BCS analyst Dmitry Babin: "They could affect oil supplies, which would reduce the already limited inflow of foreign currency from exports."

After demanding on July 14 that Putin call a cease-fire in Ukraine within 50 days, Trump said on Monday he was "very disappointed" with the Russian president, who instead of peace talks has thrown the army into a new offensive and, according to Reuters sources, is preparing for a battle for Dnipropetrovsk, Sumy and Kharkov.

"We thought we had settled this many times. And then President Putin comes out and starts firing missiles at some city, like Kiev, and kills a lot of people in a nursing home or somewhere. Bodies are lying all over the street. You can't do that," Trump said at a meeting with British Prime Minister Keir Starmer.

Later, Trump clarified that Putin's new deadline is 10-12 days. After it expires, the US could impose 100 percent duties on countries that buy Russian oil to cut Russia out of the global black gold market, which provides the Kremlin with one in four rubles of budget revenues and nearly half of the economy's total foreign exchange earnings.

According to a bill that the US Senate has already begun considering, China, India and Turkey, which buy nearly all of Russia's oil exports, could fall under Trump's tariffs. "I'd like to be generous, but we're just not seeing any progress," Trump explained.

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