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Fred Cole

An editor at FOMOdrive

  • Jul 05, 2023
  • 2 min read

The Bank of Russia explained the depreciation of the ruble

russian ruble coins declining move with russian flag

The exchange rate of the dollar was more than 90 rubles per dollar.

The Central Bank explained that the trade balance is responsible for the depreciation of the ruble.

The regulator will not be reversing the requirement to purchase foreign currency.

Rosbank has set the benchmark for the dollar exchange rate for the fourth quarter at 75 rubles/$.

On Tuesday, the dollar exchange rate exceeded 90 rubles/$ for the first time since March 28 of last year. This is due to the ruble being under pressure from the end of the tax period and increasing geopolitical tensions.

After the exchange rate of the Russian ruble dropped to below 90, the Central Bank of the Russian Federation made a timid attempt to curb speculation. Ksenia Yudaeva, the First Deputy Chairman of the Bank of Russia, reported that there were no major transactions of foreign currency purchases by Western companies leaving the country.

She believes that the decline of the ruble is due to a significant decrease in the current trade balance, which is a result of lower export earnings caused by commodity prices.

The Central Bank does not perceive any additional threats to financial stability caused by the fluctuation of the ruble exchange rate, nor does it anticipate inflation surpassing the forecast.

Yudaeva has stated that there is no need to reinstate the requirement for exporters to sell their foreign exchange earnings at this time.

Promsvyazbank has warned of potential technical risks of a further weakening of the ruble to the level of 92 rubles per US dollar. This depreciation of the ruble, which has been ongoing since the middle of last week, is due to a surge in demand for the currency from major players, combined with a limited supply.

Rosbank has observed that the ruble remains highly unstable due to unknown factors. They have estimated that the dollar exchange rate for the fourth quarter will be 75 rubles/$.

KIT Finance Broker predicts that the ruble will likely be traded between 80 and 85 rubles per US dollar during the second half of the year.

"My Investments" has a pessimistic outlook for the ruble-dollar exchange rate, predicting it to be between 87-95 rubles per dollar by the end of the year with a high degree of uncertainty.

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