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Russia’s rouble extended falls for the

fourth straight day to hit another record low on Thursday after

its sovereign bonds were downgraded, while surging oil prices

which fanned worries about global inflation also supported

currencies of crude exporters in Latin America.

Fitch and Moody’s downgraded Russia by six notches to “junk”

status, questioning its ability to service debt as Western

sanctions wreak havoc on its financial system.

The rouble hit a record low of 118.35 against

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the dollar in Moscow trading, while the interbank rate

tumbled nearly 12%.

“The volatility is going to continue, primarily because

Russian asset markets have been in global benchmarks, and

they’re effectively being removed from those benchmarks,” said

Chris Turner, global head of markets at ING.

“If there were any opportunity for foreigners to remove

rouble assets, they would, which is going to mean there’s a lot

of downside pressure on the rouble.”

Russia’s financial markets have been thrown into turmoil by

sanctions imposed over its invasion of Ukraine. British military

intelligence said Moscow’s advance on Kyiv has made scant

progress and Ukrainian forces still held Kharkiv and several

other cities under attack.

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Equity index providers FTSE Russell and MSCI said they are

removing Russian equities from all their indexes on Wednesday.

The MSCI’s index for emerging market equities edged

0.5% higher, while its currencies counterpart

rose 0.2%.

Oil prices continued their advance on Thursday, with Brent

crude futures touching their highest since May 2012 amid

U.S. sanctions targeting Russian refineries, disruptions to

shipping and a fall in U.S. crude stocks to multi-year lows.

Currencies of crude-exporting countries in Latin America

including those of Brazil and Colombia

gained on the back of sky-high commodity prices compared with

currencies of oil importers such as Turkey.

Brazil’s real rallied for the second straight day gaining

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1.5% against the dollar, while Colombia’s peso extended its

gains to a third day after rising 1.3%.

Brazil is among the central banks in emerging markets that

have been hiking interest rates since 2021, not only offering

support to its currency but also making it more attractive to

foreign investors.

“Among emerging markets, Brazilian interest rates are

skyrocketing, so it’s a perfect place for foreign investors to

make money,” said Ricardo Gomes da Silva Filho, a trader with

OVD Group in Brazil.

“And all this is happening in a moment when domestic

political issues are rather quiet now. So foreigners are taking

advantage of this gap.”

Hungary’s forint fell 0.2% against the euro after

its central bank raised the one-week deposit rate by 75 basis

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points to 5.35% at a weekly tender, as the invasion of

neighboring Ukraine roiled Hungarian markets.

Key Latin American stock indexes and currencies at 1438 GMT:

Stock indexes Latest Daily %

change

MSCI Emerging Markets 1174.33 0.51

MSCI LatAm 2467.88 3

Brazil Bovespa 115815.18 0.56

Mexico IPC 0.00 0

Chile IPSA 4536.82 1.1

Argentina MerVal 90973.47 0.803

Colombia COLCAP 1532.53 0.15

Currencies Latest Daily %

change

Brazil real 5.0350 1.45

Mexico peso 20.6200 -0.13

Chile peso 801.8 0.50

Colombia peso 3782.61 1.36

Peru sol 3.72 0.78

Argentina peso (interbank) 108.0300 -0.08

Argentina peso (parallel) 202 1.98

(Reporting by Shreyashi Sanyal in Bengaluru; editing by

Jonathan Oatis)