2023-08-15 20:07:55
The ruble raised its head on Tuesday after a significant hike in the Russian Central Bank’s key rate, but still remained close to its lowest since March 2022 against the dollar and the euro.
Around 09:25 GMT (11:25 CET), the ruble climbed 2.22% against the greenback to 98.593 rubles to the dollar.
The Russian Central Bank (BCR) raised its key rate on Tuesday from 8.5% to 12%, to counter the fall of the ruble, to the lowest against the euro and the dollar since March 2022, and to curb the inflation.
The institution also affirmed to reserve the right to take “new decisions” in the coming weeks “taking into account the dynamics of real inflation” and “the reaction of the financial markets”.
The ruble first soared very briefly at the start of the European session, gaining almost 18% against the dollar, before stabilizing on an increase of around 2.5%.
“Despite an ups and downs, the ruble has been falling steadily for a year,” said Sylvain Bersinger, analyst at Asterès.
Since the start of the year, the Russian currency has lost nearly 25% against the greenback.
In the first weeks of the Russian invasion of Ukraine, it had collapsed “before recovering strongly under the double effect of a foreign exchange support policy (brake on capital outflows, rise in interest rates to encourage purchases of the rouble for example) and the surge in the price of raw materials”, explains Mr. Bersinger.
But since mid-2022, the currency has continued to depreciate. The uprising of the paramilitary group Wagner in June “likely led to capital flight” and thus weighed heavily on the rouble, “fears of political instability (pushing) Russians to invest their capital abroad, despite administrative obstacles”, continues the analyst.
And if the surge in commodity prices, particularly gas and oil, had benefited Russia in 2022, falling prices and international sanctions are now weighing heavily on export earnings.
“The decline in oil export revenues” combined with “capital flight (and) the decline in demand from major export partners such as China and India” thus constitute a “significant threat to the economic outlook of Russia and therefore its motto”, insists John Plassard, of Mirabaud.
“Remember that Russia’s current account surplus fell by 85% between January and July,” said Plassard.
This article has been published automatically. Sources: ats / awp / afp
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