2023-10-03 10:12:55
(Moscow) The Russian currency fell again on Tuesday morning and was trading at more than 100 rubles to the US dollar, despite the Central Bank’s action to counter inflation and the weakening of the national currency.
Published at 6:12 a.m. Updated at 9:00 a.m.
The ruble, under the effect of international sanctions because of the assault on Ukraine, has been struggling for months, weighing in particular on the purchasing power of the population.
On the Moscow Stock Exchange, the price was 100.11 rubles per dollar and 104.65 rubles per euro at 7:03 a.m. local time (12:03 a.m. Eastern).
The ruble rose slightly later in the day, while remaining in the afternoon above 99 per dollar and near 104 per euro.
This is the largest fall in the ruble since that recorded in mid-August when the ruble had already exceeded 100 per dollar, a first time since March 2022 and the collapse of the Russian currency in the wake of the offensive in Ukraine.
For his part, Kremlin spokesperson Dmitri Peskov tried on Tuesday to minimize the significance of this phenomenon for the Russians.
“There is no basis for any concern,” he assured the press.
“There are some fluctuations. But we all live in the ruble zone, so excessive attention to the dollar exchange rate is just a thing of the past,” Peskov said.
The Central Bank of Russia (BCR) rushed in August to raise its key rate from 8.5% to 12%, during an extraordinary meeting called after criticism from Kremlin advisor Maxime Orechkin, who had castigated the “flexible monetary policy” of the BCR.
In mid-September, the policy rate was raised further to 13%.
This decision by the BCR, however, appears to have a limited impact for the moment, in the absence of more severe exchange control measures and the introduction at the end of September of export restrictions on gasoline and diesel by Russia.
After a year and a half of heavy international sanctions and despite rapid adaptation of the economy, Russia is facing a series of economic difficulties: inflation which is on the rise again (+5.15% in August ), weakening of the ruble, labor shortages in certain sectors, brain drain abroad, significant drop in revenues linked to the sale of hydrocarbons.
In this context, the Russian Central Bank (BCR) said in mid-September it expected a slowdown in growth in the second half of this year.
In September, Vladimir Putin, while claiming that Western sanctions had failed, denounced the weakening of the ruble as the main cause of inflation in the country, ordering the government and the BCR to take the necessary measures to stabilize the situation.
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