The ruble rose against the dollar on Thursday after Russian President Vladimir Putin took steps to reimpose currency controls to save his country’s sinking currency.
The Russian Central Bank has approved the move, According to ReutersAfter months of resistance and in favor of higher interest rates to stem the ruble’s decline. It said the measures could support currency volatility and improve liquidity.
Putin signed a decree on Wednesday aimed at letting Russian export companies – 43 in total involved in energy, agriculture and other industries – sell some of their foreign exchange earnings on the domestic market in exchange for rubles to help prop up the Russian currency.
“The main purpose of these measures is to create long-term conditions for increasing transparency and predictability in currency markets and to reduce opportunities for currency speculation,” Russia’s First Deputy Prime Minister Andrei Belousov said in a statement. CNN report.
The move helped the ruble edge higher against the dollar about 4%, hitting a two-week high. But the currency has still fallen sharply – down about 23% this year.
Troubles for the ruble began shortly after Russia invaded Ukraine last February, triggering a series of Western sanctions that ultimately sent the ruble to a record low. 120 rubles against the US dollar. At the time, the Kremlin also imposed capital controls requiring exporters to convert at least 80% of their foreign currency receipts into rubles in dollars, euros or other currencies. Three months later, the threshold was lowered to 50%, before being eliminated entirely.
Russian policymakers have been on edge last week as the yuan approached the psychological barrier of 100 rubles to the dollar.The ruble has actually exceeded august barriertriggered an emergency meeting of the central bank, a series of interest rate hikes totaling 550 basis points, and the decision to stop buying foreign currencies in the domestic market in the next few months.
The ruble continues to come under pressure due to capital outflows and poor exports, despite the Kremlin’s efforts to support it.Putin Already acknowledged pressure from soaring inflation.
But some experts believe the measure could be a possible way for the ruble to regain some of its strength relative to the dollar.
“If our export commodity parameters remain unchanged… further strengthening is possible,” Sberbank CEO Hermann Gerf reportedly said. TASS According to Reuters. “The regular base rate today is $1 to $85-$90.”
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