Russian rouble drops most in two years as U.S. warns of Ukraine invasion

MOSCOW, Feb 11 (Reuters) - The rouble fell the most in nearly two years on Friday after the United States said Russia has amassed enough troops near Ukraine to launch a major invasion, urging all U.S. citizens to leave the country within 48 hours.

A rate increase from the Russian central bank and high oil prices were no match to the concern over the perceived escalation towards war.

"It's definitely a safe-haven move," said of the spike in the dollar Bipan Rai, head of FX strategy at CIBC Capital Markets in Toronto.

"We're also seeing other (safe) haven assets rally as well, including U.S. Treasuries as well as the Japanese (yen). This feels very much like the market is growing more and more concerned with the prospect of an invasion."

White House national security adviser Jake Sullivan said mid-afternoon in Washington that a Russian attack on Ukraine could begin any day and would likely start with an air assault.

The rouble was down 2.8% at 77.1675 , set for its largest daily percentage drop against the greenback since mid-March 2020.

It had been rebounding from the nearly 15-month low of 80.4125 it hit during a sell-off last month, and traded at 74.2550 on Thursday, which was its strongest level since Jan. 3.

Versus the euro, the rouble eased 1.8% to 87.5375 on Friday.

Moscow has denied plans to invade its neighbour.

Geopolitical tensions proved to be more important for the market than the Bank of Russia's decision to raise its key interest rate by a hefty 100 basis points to 9.5%, a move that had been largely priced in. read more

Russian equities have also come under renewed pressure, remaining sensitive to tensions over Ukraine.

Russia's dollar-denominated RTS share index (.IRTS) fell 5% to 1,470.1 points, while the rouble-based MOEX index (.IMOEX) was 3% lower at 3,546.62 points. Shares in oil major Rosneft (ROSN.MM) were down 3.9% after reporting record net income for 2021 that missed forecasts. read more

Russian stocks traded in the United States tumbled, with HeadHunter Group (HHR.O) down 14.3%, Mobile TeleSystems down 5.8% and Mechel PAO down 4.2%.

"Buyers are no longer so sure of themselves: the geopolitical element is factored into prices and no new reasons to buy have appeared," Alfa Capital said.

Russian bonds also fell, with the 2047 down 3 cents and the 2043 down 2.15 cents, both yielding close to 4.5%.

Ukrainian bonds tumbled, with declines between 1.9 and 3.4 cents across all durations.

Reporting by Alexander Marrow and Andrey Ostroukh; additional reporting by Rodrigo Campos and Herbert Lash in New York; Editing by Paul Simao and Alistair Bell

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