Enjoying ad-free content?
Since July 1, 2024, we have disabled all ads to improve your reading experience.
This commitment costs us $10,000 a month. Your support can help us fill the gap.
Support us
Our journalism is banned in Russia. We need your help to keep providing you with the truth.

Ruble Picks Up After Russian Finance Minister Backs Domestic Currency

An employee uses a machine while counting Russian ruble banknotes at a private company's office in Krasnoyarsk, Siberia. Ilya Naymushin / Reuters

Russia's ruble strengthened on Friday after Finance Minister Anton Siluanov confirmed his ministry had sold foreign currency, and on expectations that exporters will increase dollar sales.

At 2:10 p.m., the ruble was about 2.2 percent stronger at 60.13 to the dollar, and had gained 2.6 percent to trade at 73.77 to the euro.

The ruble has seen intense selling pressure this week, and at one stage was down about 20 percent against the dollar, putting at risk the stability on which President Vladimir Putin has built his popularity.

The currency was on track to end the week more than 2 percent lower, though the market remains volatile amid thin trading volumes.

Analysts at Rosbank said the ruble could stabilize at about 60 to 62 per dollar on what they called the central bank's conservative approach to ruble liquidity, and the expansion of its forex repo mechanism.

Government pressure on exporters not to hoard their foreign exchange revenues is seen as another positive for the ruble, which is now down some 45 percent against the dollar this year.

The end-of-month tax period begins in earnest next week, when Russian exporters have to convert their overseas earnings into rubles to pay taxes to the state budget.

Siluanov said early Friday that the ruble would definitely firm at the beginning of next year. His verbal interventions are seen as part of government efforts to support the Russian currency.

Analysts also said that foreign-currency buying by ordinary Russians, which had applied pressure to the exchange rate in recent days, was likely to fade as the ruble firms.

"The frenzy of retail FX buying is receding but will likely maintain pressure on the ruble going into the weekend," analysts at Sberbank CIB investment bank said in a note.

So far this year, the Central Bank has spent more than $80 billion defending the currency, which has been hit by a collapse in oil prices, as well as by Western sanctions over Ukraine, which have dented investors' appetite for Russian risk.

The bank has, however, scaled back its support for the ruble since last month, when it floated the currency.

Russia's stock market suffered new falls on Friday, bucking generally bullish sentiment on global markets.

The dollar-denominated RTS index was down 1.5 percent to 753 points, while its ruble-based peer MICEX traded 2.3 percent lower at 1,442 points. Both indexes were on track to end the week lower.

The business conglomerate Sistema again led the best-performing stocks, rising by more than 15 percent a day after its share price more than doubled.

Appetite for Sistema has been boosted by the release of its chairman from house arrest and hopes that a criminal investigation into both the company and its chairman will be dropped.

… we have a small favor to ask. As you may have heard, The Moscow Times, an independent news source for over 30 years, has been unjustly branded as a "foreign agent" by the Russian government. This blatant attempt to silence our voice is a direct assault on the integrity of journalism and the values we hold dear.

We, the journalists of The Moscow Times, refuse to be silenced. Our commitment to providing accurate and unbiased reporting on Russia remains unshaken. But we need your help to continue our critical mission.

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 you can be confident that you're making a significant impact every month by supporting open, independent journalism. Thank you.

paiment methods
Not ready to support today?
Remind me later.

Read more