Central bank intervention

Russian rouble stops its slide for the time being

(Bild: stock.adobe.com/blackday)

The rouble has stopped its slide for the time being. After the Russian national currency had lost a huge amount of value in recent days and was at its lowest level since the invasion of Ukraine in February 2022, the central bank in Moscow had to intervene.

As an emergency measure, it decided to stop buying foreign currency on the domestic market until the end of the year. This supported the rouble, which had depreciated by more than seven percent on Wednesday alone. "The reason for the turnaround is the central bank's decision to stop buying foreign currency as part of its budget policy," explained analysts at brokerage firm BCS. However, they now expect exchange rates to fluctuate sharply.

The Russian central bank

(Bild: APA/AFP/Natalia KOLESNIKOVA)

Immediately after the intervention, the rouble appreciated by 2.6 percent against the US dollar to 110.20. According to the Moscow Exchange (MOEX), the rouble also made slight gains against the Chinese yuan to 14.60.

Enormous difficulties with payment transactions
The sharp fall in recent days came as a surprise to economists. In a Reuters survey at the beginning of November, they had expected the Russian currency to defend the 100 mark against the dollar. However, new US sanctions triggered panic buying on the currency markets. Most major Russian banks - including Gazprombank - are now affected by US sanctions and are therefore unable to carry out bank transactions in dollars. There is a settlement deadline for transactions with Gazprombank until December 20. Until then, Russia's remaining energy customers in the West will have to find another payment solution. 

Many of the sanctioned banks are buying US dollars and euros abroad and importing cash by air from countries that have not imposed trade restrictions with Russia.