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Peter Davis

An writer at FOMOdrive

  • Oct 09, 2023
  • 2 min read

The dollar exchange rate exceeded 102 rubles, but then fell sharply

On Monday, the dollar exchange rate rose above 102 rubles, however, it then dropped significantly.

The American currency closed below 100 rubles/$, having lost about three rubles from its highs.

Since March 2022, after the ruble's minimums were updated, speculators began to take profits.

The Central Bank reported that in September, Russians started buying foreign currency.

On Monday, the Russian currency was able to rise despite strong fluctuations, during which it had reached a one-and-a-half-year low of 102.34 rubles/$. The dollar exchange rate decreased by 1.08 rubles, settling at 99.32 rubles/$.

Expectations that the Russian authorities will introduce a new set of measures to stabilize the ruble's exchange rate are continuing to support the currency, Interfax-CEA reported.

Oil prices saw a significant increase, and by the evening had regained almost half of the losses from the previous week. This was due to the escalating geopolitical tensions in the Middle East, following the Hamas attack on Israel, which raised the possibility of disruptions in the supply of resources in the area.

For many months, the ruble has been weakening due to an ongoing imbalance between the supply and demand for foreign currency. Despite the new rate, export revenues are not increasing at the same rate as imports. Furthermore, a new geopolitical factor has emerged in the markets - a military conflict in the Middle East.

Some analysts predict that, without any new measures to support the ruble exchange rate, the rate will increase in the short-term to between 104 and 107 rubles per US dollar.

Bank St. Petersburg believes that, despite possible short-term volatility in the foreign exchange market, the ruble still has the potential to strengthen, even with potential verbal interventions.

In September, Russians purchased foreign currency to the tune of 39.4 billion rubles, according to the Central Bank. Net foreign currency sales by the largest exporters rose to $9.2 billion, up from $7.2 billion in August.

A study conducted by Russian Standard Bank revealed that last month, citizens were almost three times more likely to purchase cash dollars than to sell them.

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