The ruble exchange rate has fallen significantly following signals from the Russian central bank for less support purchases.
The Russian currency devalued 3.4 percent against the dollar to 100.50 on Friday, over-the-counter market data showed. The rate also fell against the Chinese yuan in trading on the Moscow stock exchange, albeit only by 0.28 percent to 13.37.
The central bank had previously said it would reduce its net sales of foreign currency by almost 60 percent from January 9 as part of its complex currency program. After the ruble fell to its lowest level in about two and a half years in November, around 113 to the dollar, due to new US financial sanctions, the central bank stepped in to support the currency. On behalf of the Ministry of Finance, she postponed foreign currency purchases. The ruble has since regained much of its lost ground. It stabilized around 100 per dollar.
New model for official exchange rate formation
In a separate announcement, the central bank said it would adjust the mechanism for official exchange rate formation. In the future, data from the stock exchange and over-the-counter trading will be combined and cross-prices will be used.
Trading in the dollar and the euro was shifted to the over-the-counter market in June 2024 after sanctions were imposed on the Moscow Stock Exchange as a result of Russia’s war of aggression against Ukraine. The Chinese yuan is still traded there, making it the most traded foreign currency in Russia. “We will continue to monitor changes in the structure of the foreign exchange market and, if necessary, further refine the mechanism for determining the official exchange rate of foreign currencies against the ruble,” the Central Bank said as the relevant supervisory authority. .
Source: Krone
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