- The ruble weakened against the dollar on Wednesday after Putin signaled an escalation in his war against Ukraine.
- Russia’s fiat currency fell to 62.45 in the early morning hours before paring losses.
- Most global currencies lost ground against the dollar as the US central bank is set to announce more interest rate hikes.
The ruble fell on Wednesday after Russian President Vladimir Putin announced plans to call in an additional 300,000 troops and threatened to use nuclear weapons.
Russia’s escalation of its war against Ukraine comes after Putin’s forces were routed in eastern Ukraine earlier this month, ceding large swaths of territory within days.
The Russian currency fell to as low as 62.45 against the US dollar early Wednesday, or about 3%, but pared losses to recover to 60.736, down 0.56%.
Most global currencies lost ground against the dollar as the Federal Reserve was set to announce its latest rate hike for benchmark interest rates. The euro slipped and the US dollar index rose 0.49% on Wednesday.
Putin said in a televised speech that the army is activating 300,000 reservists, the first such mobilization of Russia since World War II.
He also hinted at the deployment of Russian nuclear weapons in Ukraine as the Kremlin continues to suffer heavy military losses, saying “Russia also has many types of weapons of destruction, the components of which are in some cases more modern than those of NATO countries.”
The ruble has seen wild swings since the Russian invasion of Ukraine. It fell to less than a penny in the early days of the war, then rebounded sharply to become the best-performing currency against the dollar after Russia’s central bank sharply tightened interest rates and imposed strict capital controls.