MOSCOW, November 21 (RIA Novosti) – The euro tumbled against the ruble in Wednesday trade on the Moscow Stock Exchange, past the 40 ruble mark after European officials failed to strike a deal on another portion of bailout funds for debt-saddled Greece, market data suggested.
As of 3:22 p.m. Moscow time, the single European currency fell by 19 kopeks against the ruble to 39.93 rubles, the minimum level since late September.
After 12 hours of talks in Brussels, Eurozone finance ministers withheld approval on Tuesday night for a vital 31.5 billion euro loan for Greece, which is teetering on the brink of a sovereign default.
Following the finance ministers’ meeting, Eurogroup President Jean-Claude Junker said that the Eurogroup will meet again on November 26 to complete “further technical work on some elements of this package.”
International investors were unnerved by the news, seeking refuge in US dollars and selling Euros.
“The market doesn’t like these pauses and delays until tomorrow. The euro/dollar pair reacted negatively to this news,” Investcafe analyst Anna Bodrova told RIA Novosti.
The euro dropped on this latest Greek news, sliding to $1.2759 from around $1.2812 before the announcement was made.
Greece has been receiving bailout loans since May 2010, and to date has received nearly 149 billion euros ($191 billion) of funds from Europe and the IMF, out of a total promised bailout of 240 billion euros.
The country has had to resort to expensive short-term borrowing, while the European Union and the IMF consider whether to release the latest 31.5 billion euro tranche of bailout funds.
Greece has had to implement severe deficit reduction measures in order to comply with international lenders’ requirements tied to the loans, such as mass redundancies in the public sector, social welfare cuts and privatization. This sparked a wave of social discontent, triggering mass riots and general strikes.
International investors fear that Greece’s sovereign default and potential exit from the eurozone might trigger a chain reaction across Europe, affecting European banks and forcing other countries like Portugal or Spain out of the currency union.