Russia’s currency fell on Thursday to its lowest dollar value in nearly two years, jarred by new U.S. sanctions imposed in response to a nerve-agent attack on a former Russian spy in Britain.
For several years, the Russian economy has appeared able mostly to shrug off the effects of a series of Western sanctions tied to its incursions into Ukraine and its election meddling. Buoyed by rising oil prices, the economy even grew modestly this year.
But the ruble’s precipitous decline may be a clear sign that sanctions have begun to cloud the country’s long-term economic outlook.
As the ruble slumped through the day, officials in Moscow expressed dismay that the new restrictions came so soon after what they saw as a positive summit between President Donald Trump and Vladimir Putin in Helsinki last month.
“Such decisions made by the American side are absolutely unfriendly, and you cannot associate them with the constructive, even if difficult, atmosphere we had during the last meeting of the two presidents,” Dmitry Peskov, the Kremlin spokesman, told journalists in a conference call.
When Trump and Putin met, Russia’s foreign minister, Sergey Lavrov, called the summit “better than super” for Russia. But investors were taking a different view this week.
A domestic bond issue was met with lackluster demand despite rising interest rates. And at times, Russian media reported, liquidity dried up on currency exchanges as ruble sellers far outnumbered buyers.
Market turmoil began earlier this month after Republican and Democratic lawmakers in Congress introduced a draft bill to punish Russia for election meddling, and accelerated with the announcement of the separate chemical weapons sanctions on Wednesday.
Before the sanctions scare began, it cost 62.5 rubles to buy a dollar, but by the end of the day Thursday the Russian currency had weakened to 66.5 to the dollar. Russia’s main stock index, the Micex, dipped on news of the chemical weapons sanctions but recovered losses by the close.
Some companies were hit harder. Shares in Aeroflot, the national airline, fell 11.4 percent before bouncing back later in the day. The chemical weapons sanctions could ban flights between the United States and Russia within three months, a State Department official told reporters in Washington.
The Trump administration said it was acting in compliance with the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991, which mandates that once the government has determined that a country has used chemical or biological weapons in violation of international law, sanctions must be imposed.
British officials have declared that Russia was to blame for the poisoning of Sergei Skripal, a former Russian intelligence officer once imprisoned for selling secrets to the British, and his daughter, Yulia. They were exposed to a rare nerve agent belonging to a class of Soviet-developed chemical weapons known as Novichok. The Skripals survived, but a woman later exposed to the same chemical in Britain died.
The restrictions cover exports to Russia of anything with a potential national security purpose, such as gas turbine engines, electronics, and testing and calibration equipment.
The ruble tumbled despite what economists considered a modest direct effect on Russia’s economy of this sanction, which will come into force later this month.
The new measures, wrote Lilit Gevorgyan, a principal economist at IHS Markit, are “less menacing” than sanctions announced in April that targeted politically connected oligarchs. But they unnerved investors because they signaled the U.S. government’s willingness to keep taking steps.
“The escalating ‘sanctions war’ between the U.S. and Russia, especially the uncertainty surrounding the long-term investments in critical energy projects, will damage the overall investment activity,” Gevorgyan wrote. “The investor community is unsettled.”
Most economists have attributed a recession in Russia that began in 2014, after the Russian annexation of Crimea and military intervention in eastern Ukraine, to falling global oil prices rather than Western sanctions. The economy has since resumed growing.
Russia has $458 billion in gold and hard currency reserves it could use to prop up the ruble, but the central bank has been allowing its value to drop, and did so again this week. The policy helps domestic industry and agriculture.
Russia has been subjected to successive waves of sanctions. The Obama administration imposed sanctions for Russia’s actions in Ukraine and for meddling in the 2016 presidential election. The Trump administration in April sanctioned oligarchs and government officials over the election meddling and other “malign” activities, and this week over the nerve agent attack in Britain.
Russia has few economic means to retaliate. Sergey N. Ryabukhin, a member of the upper house of Parliament, suggested banning sales of Russian engines used on some U.S. rockets, though the U.S. space industry has other options.
In Moscow, some officials described the new sanctions in terms of U.S. domestic politics. They were imposed, the Russians said, as part of a struggle in the United States between Trump and his supporters, who wanted to engage with Russia, and a “deep state” of national security bureaucrats, who were determined to worsen relations.
“This means more pressure on Russia as well as those U.S. politicians who want a rapprochement with Russia, with the ultimate aim of exacerbating the situation,” Aleksei V. Chepa, the deputy chairman of Parliament’s Foreign Affairs Committee, told the state-controlled broadcaster RT.
Vladimir I. Batyuk, a scholar of the United States at the Russian Academy of Sciences, told the RIA news agency that, “all the positive moments that were noted after the meeting of the two presidents in Helsinki will be all but completely offset, naturally.”