Central Bank Ramps Up Defense of Battered Ruble

Russia’s Central Bank quintupled its intervention on the domestic foreign exchange market to 530 million rubles ($16 million) on Tuesday to prop up the ruble, battered in the past few days over negative external developments, the regulator’s data suggested on Wednesday.

The regulator stepped in on Monday, selling 100 million rubles worth of foreign currency to foreign exchange market participants, which continued to dump their ruble holdings in a flight to the greenback as a safe heaven amid the flaring eurozone sovereign debt crisis and a fall in world oil prices.

The ruble hit a five-month low in Tuesday’s trade, sinking to 32.20 rubles to the dollar on the MICEX-RTS foreign exchange market, past the psychological level of 32 rubles, the lowest level since December 30, 2011.

The national currency continued its slide in Wednesday trade, plunging by 33 kopecks against the dollar to 32.50 as of 11:03 a.m. Moscow time (07:03 GMT).

Deputy Economic Development Minister Andrei Klepach said on Tuesday the weakening of the ruble may push up inflation in Russia,

“Of course, these developments are negatively affecting inflation but so far these risks are limited,” Klepach told Prime news agency, adding the impact would be felt with some time lag.


Leave a comment