Investing.com - The currency of Russia, the ruble, continues to plummet amidst an escalating political crisis. This decline was accentuated on Thursday when it reached a low of 87.75 against the dollar.
This depreciation is largely due to continued unrest caused by the recent rebellion led by the private military company, Wagner Group. The fallout from this revolt may prompt a response from America in terms of supplying long-range missiles to Ukraine.
Thursday saw another dip for the ruble as ripple effects from last weekend's mutiny orchestrated by Wagner Group persisted. The currency hit an all-time low in over a year at 87.75 per dollar marking its steepest downfall since early 2023 and representing an overall decrease of more than 80% from its peak in June last year.
Over time, several factors have contributed to weakening the ruble including falling oil and gas prices, increasing American bond yields, rampant inflation, and a struggling economy overall.
However, it was Saturday's assault on Moscow that triggered Russians' rush towards foreign currencies resulting in increased demand across fifteen regions according to First Deputy Prime Minister Andrei Belousov’s statement earlier this week.
In recent days there have been growing signs of instability within Russia's military ranks with rumors circulating about secret arrests among top brass who may have had foreknowledge about the uprising.
Adding salt to injury for the already weakened ruble was timing; coinciding with the tax period ending which typically sees exporters converting their foreign currency earnings into local currency - further reducing demand for rubles and exacerbating its value loss versus other currencies.
The country’s political landscape could be facing even greater upheaval after Yevgeny Prigozhin – leader of Wagner Group – openly criticized the Kremlin’s approach towards conflict resolution with Ukraine while advocating for changes in defense leadership positions.
Meanwhile, reports suggest that US officials are contemplating providing Army Tactical Missile System (ATACMS) weaponry support to Ukraine despite previous reservations given current circumstances stemming from ongoing turmoil instigated by the Wagner group back home in Russia.
Western officials seem convinced that now would be the opportune moment to ramp up the delivery of advanced weapons like the ATACMS long-range missile system which would allow Kyiv to target Russian locations far beyond the front lines, making the task of providing ground support significantly harder.