Moscow, Russia – Russia’s Central Bank announced on Wednesday that it will cease buying foreign currency on the domestic market for the remainder of 2024, as the ruble continues to decline to its lowest levels since the country’s invasion of Ukraine in 2022. This decision is aimed at reducing volatility in the financial markets, according to the Russian regulator.
The suspension of foreign currency purchases will be effective from Thursday until December 31, with the postponed purchases to be conducted throughout 2025, as stated by Russia’s Central Bank. This move follows a previous suspension of planned foreign currency purchases from August 10, 2023, until December 31, 2023, in response to the downward pressure on the ruble at that time.
This year’s suspension comes as the ruble dropped to as low as 113 to the dollar, marking its lowest level in over 32 months. Finance Minister Anton Siluanov noted that a weaker ruble benefits Russian exports, but it also contributes to inflation, potentially adding 1.5 percentage points to the current inflation rate of 8.5% following the ruble’s recent decline.
The Central Bank has set the official exchange rate for the ruble at 108.01 to the dollar and 113.09 to the euro for Thursday. Additionally, the Bank announced it will continue to sell foreign currency through its sovereign wealth fund, with plans to sell the equivalent of 8.4 billion rubles per day in the latter half of 2024. This strategy aims to stabilize the currency and mitigate market volatility.