Ruble Bounces Back from One-Month Low Against Dollar
Published on: December 7, 2023.
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The Russian rouble experienced a brief dip in early trading on Thursday but quickly recovered. This volatility can be attributed to lower oil prices and a decrease in foreign currency supply from exporters.
President Vladimir Putin, along with the heads of Russia’s central bank, finance ministry, and economy ministry, were scheduled to speak at a forum hosted by VTB Bank. As of 1024 GMT, the rouble had strengthened by 0.3% against the dollar, trading at 92.57. Earlier, it had hit its lowest point since November 3 at 93.56.
The rouble also saw a 0.3% gain against the euro, trading at 99.81, and a 0.1% increase against the yuan, trading at 12.93. Alexei Antonov of Alor Broker noted that the devaluation of the rouble is continuing and predicted that it may head towards 97.5 to the dollar in future sessions. This decline follows a fall from around 89 to the dollar at the beginning of last week.
The rouble has lost support from the month-end tax period, during which Russian exporters typically convert foreign currency into roubles. However, prior to last week, the currency had enjoyed seven weeks of gains. It had rebounded from over 100 to the dollar due to high interest rates and reduced capital outflows resulting from Putin’s introduction of forced currency conversion for exporters in October.
Market observers will be closely monitoring Central Bank Governor Elvira Nabiullina, who may provide insights ahead of the bank’s final interest rate decision of the year, expected on December 15. Analysts polled by Reuters anticipate the Bank of Russia will raise rates to 16%.
According to German Gref, CEO of Sberbank, Russia’s largest lender, the fundamental value of the rouble at present is around 90 to the dollar. Gref stated that there is limited potential for significant strengthening or weakening of the rouble.
Brent crude oil, a key global benchmark for Russia’s main export, experienced a slight recovery, rising by 1.4% to $75.33 per barrel after hitting a five-month low in the previous session. Conversely, Russian stock indexes were down, with the dollar-denominated RTS index falling by 0.3% to 1,042.0 points and the rouble-based MOEX Russian index declining by 0.6% to 3,061.5 points.
Source: [Devdiscourse](https://www.devdiscourse.com)
