Russia’s central bank said on Wednesday it would stop foreign currency purchases to ease pressure on the financial markets after the rouble weakened beyond 110 to the U.S. dollar, down by one-third since early August.
The central bank said it had decided not to buy foreign currency on the domestic market from Nov. 28 until the end of the year, but to defer these purchases until 2025.
Rouble Decline: Down 7.25% to 113.15 per USD; weakest since March 2022. The Yuan exchange rate exceeds 15.
Inflation and Economy:
Inflation at 8%, with real wages up 8.4% (Sept.) and unemployment at 2.3% (Oct.).
10% rouble drop adds 0.5 points to inflation; recent declines add ~1.5 points.
Sanctions Impact: Gazprombank sanctions disrupt forex flow. Exporters may face higher mandatory forex sales.
Market Pressures:
Stocks fell 20% YTD; deposits attract high-interest savings.
$1.5B monthly budgetary forex sales via yuan continue.
Government Response: Economy Minister cites external factors, expects stabilization soon.
Outlook: Persistent inflation, sanctions, and forex market opacity hinder quick recovery. Volatility likely to persist.
