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Ruble hit by sanction woes while Ukraine grants eastern regions special status

FXStreet (Łódź) - The Russian ruble fell to a record low of 38.5175 against the dollar on Tuesday on fears that sanctions would cause lasting damage to the Russian economy.

Alexei Kudrin, a former finance minister under Putin, said during a business conference that West's sanctions "are going to have an effect (on the economy) for the next one or two years because they have limited opportunities for investment in this uncertain environment."

Investor confidence was further undermined by reports that Moscow is planning to strike back by introducing import bans, which could damage domestic consumer spending.

Meanwhile, the Ukrainian parliament passed a law in line with the ceasefire agreement, granting special self-rule status to the eastern regions of the country overrun by pro-Russian separatists.

The new bill legislates Russian as the second official language, establishes a special economic rule in the region, sets the early local elections date for December 7 and offers amnesty to the militia members.

Still, the leaders of the rebels stated that they are not interested in enjoying a special status, and demanded full independence from Ukraine. The fighting, which continues in Donetsk, as well as the presence of about 25,000 Russian soldiers close to the Ukrainian border, highlights the fragility of the truce.

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