Russia halts currency buys as rouble tumbles
The Russian central bank said it would no longer purchase foreign currency on the domestic market from Thursday, as it sought to prop up the ruble, at its lowest level against the dollar since March 2022.
"The Bank of Russia has decided that, from 10 August through 31 December 2023, it will not buy foreign currency in the domestic market," the central bank said in a statement late Wednesday.
"This decision is aimed at reducing volatility in financial markets," it said.
With the announcement, the bank is setting aside its budget rule, under which Russia buys or sells foreign currency stored in its National Wealth Fund to compensate for fluctuations in revenues from oil and gas exports.
The move comes after the ruble fell sharply in recent weeks, prompting fears among many Russians that their standard of living could take a hit.
On Thursday morning, Russia's currency was trading at 107 rubles to the euro and 97 rubles to the dollar, its lowest levels since the early days of Moscow's offensive in Ukraine.
The central bank had restarted purchases of foreign exchange under the budget rule in January, after a pause of almost 10 months that saw Russia hit with a raft of Western sanctions in response to the conflict in Ukraine.
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