Is Russian ruble's new devaluation around the corner?

Is Russian ruble's new devaluation around the corner?

The ruble sharply fell against the dollar and the euro on the Moscow exchange today on the news of fresh U.S. sanctions over Moscow's alleged poisoning of an ex-spy in Britain.

The dollar hit its highest level against the ruble since November 2016, with the ruble touching 66.7099 to the dollar this morning.

As of 10:10am (MSK), the dollar exchange rate was worth 66.73 rubles, but as of 11:50 (MSK), it fell bellow 66 rubles. As of 12:20, the rate hit the lowest point of the day - 65.77 rubles.

As of 14:50 (MSK), the dollar exchange rate stabilized at 66.15 rubles.

The head of the department of stock markets and financial engineering of the Faculty of Finance and the Banking Business of RANEPA, Konstantin Korischenko, speaking with Vestnik Kavkaza, noted that no new major jumps in the exchange rate should be expected. "All those negative expectations that could be associated with the new sanctions have already manifested themselves. As for the level, it is unlikely that the dollar exchange rate will rise to 70 rubles, it would be too high devaluation. The level of devaluation has now reached about 8-10% of the initial level of the exchange rate, that is, it is close to the Central Bank's deposit rate," he said.

Chairman of the State Duma's Financial Market Committee, Anatoly Aksakov, also called on not to fear a strong decline of the ruble. "Of course, there will be fluctuations, but the Russian currency will not drop to 70 rubles per dollar, in addition, it is is temporary. I think that in a few days after the sanctions are introduced, the ruble will return to its previous level, and in a couple of weeks it will fully restore its positions," the expert said.

According to him, now traders are most afraid of the sanctions against state-owned banks: they will be followed by restrictions on operations, which can create certain difficulties in payments between companies that are serviced by these banks.

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