Russian Central Bank explains ruble’s volatility

Russian Central Bank explains ruble’s volatility

Russia’s Central Bank can adjust its daily purchases of foreign currency to curb the ruble’s volatility as part of the implementation of the budget rule mechanism, the regulator said in a press release. Meanwhile, transactions as part of the budget rule will be fully carried out within a longer period of time.

The surge in the ruble’s volatility over the past several days naturally stems from the financial market’s reaction to reports about new potential sanctions, according to the statement. "Such volatility episodes emerged earlier amid discussions over sanctions-related restrictions and were temporary. Substantial sales of export currency earnings still back the ruble," the Central Bank pointed out.

The regulator added that there are enough instruments in place to prevent financial instability threats, TASS reported.

The Bank of Russia purchased $8.4 billion rubles ($125 million) worth of foreign currency on the domestic market for the Finance Ministry for August 9 settlement (virtually on August 8).

Meanwhile, the Central Bank’s foreign currency purchases for the Finance Ministry amounted to 16.7 billion rubles ($249 million) on the previous day. On August 1, 2, 3, 6 and 7, the regulator purchased currency worth around 16 billion rubles each day.

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