Russian Ruble Hits 18-month High Against Dollar on Surprise Announcement by U.S. Treasury on Russian Sanctions

The Russian ruble hit an 18-month high of 58.8493 against the U.S. dollar on Thursday as the Department of the Treasury's Office of Foreign Assets Control issued a cyber-related general license (GL 1), which allows American companies conduct certain types transactions with the FSB.

The GL 1 makes several amendments to executive orders passed in December of 2016 by the Obama administration related to election-related hacking charges.

More specifically, American companies will be allowed to transact with the FSB in a limited fashion and in accordance with Export Administration Regulations.

The Treasury states in GL 1 that the “exportation, reexportation, or provision of any goods, technology, or services to the Crimea region of Ukraine” is still not allowed.

In a press conference this morning, White House Press Secretary Sean spicer said the Trump administration in not easing sanctions on Russia.

Spicer explained that the Treasury Department’s limited license is an amendment to existing sanctions for exempting certain companies/industries that should have been affected by the ban.

Spicer said:
“From what I understand, it’s a fairly common practice for the Treasury Department ,after sanction are put in place, to go back and look at whether or not there needs to be specific carve-outs for different industries, products and services that need to be going back and forth.”
Prior to the news, the ruble was up 1 percent against the greenback on the day, however, the unexpected announcement sent the USD/RUB currency pair tumbling to an 18-month low in the space of 15 minutes.

At press time, most of the ruble’s quick gains have been lost as currency traders digest the full implications of GL 1.

Rubles image by eltpics