Russian Ruble Drops 17% Amid Falling Exports, Rumored Intervention
The Russian ruble extended a recent slump Thursday, declining 17% against the U.S. dollar in 48 hours to reach its lowest level since late May.
The ruble hit 64.5 against the greenback during morning trading on the Moscow Exchange as the Russian authorities apparently intervened in currency markets to stop the ruble from strengthening and energy exports to Europe declined.
“They are coordinating to buy currencies of ‘more friendly countries’ such as [Chinese] yuan to artificially depress the exchange rate,” analyst Nick Trickett told The Moscow Times.
After a currency collapse when the Kremlin ordered troops into Ukraine in February, the ruble strengthened dramatically as a result of falling imports and a raft of currency controls imposed by the authorities. But officials have been warning that the strength of the ruble — which neared 50 against the U.S. dollar last week — could be harmful to the Russian economy as it dents Russia’s income from selling commodities abroad.
Finance Minister Anton Siluanov said last week that the government was considering intervention on the currency markets to ease upside pressure on the ruble.
Falling volumes of Russian energy exports are also believed to be pushing the ruble to weaken. “[Lower gas sales to Europe] would mean a decrease in export earnings and, as a result, a decrease in foreign currency sales on the market,” the chief economist at Alfa Bank, Natalia Orlova, told independent media outlet The Bell on Tuesday. Read More…
