Traders have been betting the ruble will appreciate as the country tries to contain accelerating inflation. Until recently, the Central Bank has used its currency reserves to keep the ruble pegged against a basket of dollars and euros at a lower level to help the country's exporters.
"Lots of people have put money back on the ruble trade lately, and they're trying to shake those people out," said Clemens Graf, chief economist in Moscow at UBS. "If you introduce volatility into the ruble, then people will have to think twice before putting a long position on the ruble."
The ruble slipped 0.3 percent to 29.76 versus the basket by 6:22 p.m. in Moscow. It lost 0.3 percent to 23.9 per dollar, and dropped by the same amount to 36.94 per euro. Until Tuesday, when it slid 0.2 percent, the ruble had remained little changed, at around 29.61 against the basket since the beginning of March.
The Central Bank "changed the order of currency interventions," it said in a statement Wednesday. "In addition to the operations of the [Central Bank] on the domestic foreign-exchange market to limit fluctuations in the value of the basket, the bank has begun regular interventions, the amounts to be determined by taking into account the conditions of the domestic currency market."
The measure is also aimed at preparing the country for an inflation-targeting regime and a free-floating currency, the statement said.
A Message from The Moscow Times:
Dear readers,
We are facing unprecedented challenges. Russia's Prosecutor General's Office has designated The Moscow Times as an "undesirable" organization, criminalizing our work and putting our staff at risk of prosecution. This follows our earlier unjust labeling as a "foreign agent."
These actions are direct attempts to silence independent journalism in Russia. The authorities claim our work "discredits the decisions of the Russian leadership." We see things differently: we strive to provide accurate, unbiased reporting on Russia.
We, the journalists of The Moscow Times, refuse to be silenced. But to continue our work, we need your help.
Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and every contribution makes a significant impact.
By supporting The Moscow Times, you're defending open, independent journalism in the face of repression. Thank you for standing with us.
Remind me later.