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Peter Davis

An writer at FOMOdrive

  • Feb 12, 2024
  • 2 min read

The Bank of Russia assessed the impact of the Wagner rebellion on the ruble exchange rate

Russian ruble coins staying on pile of coins

On Tuesday, the dollar dropped below the 90 rubles/$ mark.

The Bank of Russia elucidated the recent devaluation of the ruble.

The currency was probably bought on the market by the largest banks.

The Kremlin does not perceive any danger to the economic security of Russia as a result of the depreciation of the Russian currency.

On Tuesday, the dollar fell below the 90 ruble mark. This marks the third consecutive day of the Russian currency strengthening, after it hit its lowest point since March of last year at around 94 rubles per dollar last week.

In its June "Financial Market Risk Review," the Bank of Russia attempted to elucidate the plummet of the ruble exchange rate last month, which saw a decrease of more than 10% against the dollar.

In June, there were numerous interpretations of the events that transpired - ranging from a major transaction involving Russian assets to the influence of the "Prigozhin rebellion" on the currency exchange rate.

”The Bank of Russia has stated that the Wagner PMC mutiny on June 23-25 had a negligible effect on the monthly fluctuations of the ruble. The main decrease in the ruble's value was mainly due to a decrease in foreign currency income from Russian exports.

RBC reported that the largest exporters saw a 22.9% decrease in their net sales of foreign currency in June, amounting to $7 billion, despite selling around 90% of their foreign exchange earnings.

The share of the three largest buyers of foreign currency has grown significantly in the market, with the "largest" buyer increasing its market share from 10% to 40%. Altogether, these three buyers now account for almost 60% of the market, though the identities of these buyers remain undisclosed.

The depreciation of the exchange rate has caused some corporate borrowers to need to convert their foreign currency loans into rubles, which has partially explained the purchases of foreign currency by banks. This has resulted in the banks needing to balance their open foreign exchange positions.

Net purchases of foreign currency by the population amounted to only 300 million rubles, according to the Central Bank's report, with almost no effect on the market.

Dmitry Peskov, the presidential spokesman, has stated that the decline of the ruble does not present a danger to the economic security of the Russian Federation. He remarked that "the situation is better than anticipated."

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