Russian Markets Dive as Peace Talks Stumble, U.S. Dollar Hits Weekly High

The Russian stock and currency markets experienced a significant drop in trading on Wednesday, following news that peace talks regarding Ukraine have once again encountered obstacles.

By 12:30 p.m. Moscow time, the U.S. dollar had increased by 1.5% in the foreign exchange market, reaching 82.71 rubles. On the Russian interbank market, it rose to 83.1 rubles — its peak in a week, as reported by Reuters.

The euro jumped 2.2% against the ruble, reaching 94.5 rubles, while the yuan saw a 2% increase on the Moscow Exchange to 11.35 rubles, also hitting a weekly high.

The MOEX index, which was close to the 3,000-point threshold on Tuesday evening, fell to 2,900 at the start of the trading day. Shares of Gazprom dropped by 3.2%, Sberbank by 1.5%, VTB by 3.1%, and Rosneft by 2.9%. Companies like Aeroflot, NLMK, MMK, and Alrosa saw their values decline by over 3%.

«The downward trend is largely influenced by geopolitical issues, as the anticipated negotiations in London scheduled for today to address the military conflict in Eastern Europe have failed to materialize,» stated Vladimir Chernov, an analyst with Freedom Finance Global.

The British Foreign Office announced that top diplomats from the U.S. and Europe did not attend the latest round of peace talks in London, and discussions regarding a ceasefire are now being conducted among high-ranking officials.

Last Thursday, U.S. Secretary of State Marco Rubio met in Paris with the French and British foreign ministers and a senior German representative, where he introduced a U.S. proposal aimed at ending the conflict.

According to Axios, this proposal includes U.S. recognition of Russia’s annexation of Crimea, a de facto acknowledgment of Moscow’s control over four other partially occupied regions of Ukraine, the easing of sanctions, and an assurance of future economic collaboration. The report noted, however, that the security guarantees for Ukraine remain unclear.

Several aspects of the proposal are unacceptable to Ukraine and European nations.

An official involved in the discussions told Axios that both Rubio and Trump’s envoy Steve Witkoff withdrew from the London meeting after Ukraine indicated its preference to concentrate on a 30-day ceasefire proposal instead of the broader U.S. framework.

Rubio cautioned last week that Washington could withdraw from ceasefire negotiations «within days» if neither Kyiv nor Moscow showed urgency in seeking a resolution to the ongoing conflict.

Chernov predicts that the ruble and the Russian stock market may continue to decline through the week, with the U.S. dollar potentially climbing to between 85 and 86 rubles, and the MOEX index dropping to 2,860 points.