The Russian rouble has fallen to a new all-time low against the US dollar amid concerns about the effect of sanctions on the country’s economy.
The rouble fell about 1% to 38.72 per dollar, the weakest it has been since the currency was restructured in 1998.
Last week, the US and Europe introduced further sanctions against Russia for its actions in Ukraine.
Former finance minister Alexei Kudrin said on Tuesday sanctions would have a material impact on the Russian economy.
“The sanctions that have been imposed are going to have an effect for the next one or two years because they have limited opportunities for investment in this uncertain environment,” he said, according to Interfax news agency.
New sanctions imposed on Friday last week targeted Russia’s state finances, energy and arms sectors.
Russian state banks are now excluded from raising long-term capital in the European Union, export bans have been extended, while future EU-Russia arms deals are also banned.
The EU has also followed the US in targeting more individuals in President Putin’s inner circle, as well as some major companies.
The West accuses Russia of supporting Ukrainian pro-Russian rebels in their conflict with government forces. Russia denies any direct involvement.
Other factors have also affected the value of the rouble, including the fall in the price of oil and reduced support for the currency from the central bank.
“Oil and related products still account for nearly half of exports, meaning that lower prices translate into lower export revenues, which in turn puts pressure on the currency,” said Neil Shearing at Capital Economics.
Last month, Russia’s central bank said it would reduce its support for the rouble and allow the currency to trade within a wider band.
Reports on Tuesday suggested that, in light of the recent falls in the value of the rouble, the government and the central bank were looking to provide extra support for the currency.
Read more: Russian rouble hits new low on sanctions