The Bank of Russia announced on Wednesday that it will suspend foreign currency purchases on the domestic exchange from November 28 until the end of the year to curb market volatility.
The decision follows a sharp decline in the ruble, which fell to 114 against the US dollar on Wednesday, nearing record lows. Meanwhile, the central bank stated it will continue selling foreign currency to replenish the National Wealth Fund, with daily operations currently totaling 8.4 billion rubles ($74 million).
The regulator indicated that resuming foreign currency purchases will depend on “the situation on the financial markets” and noted that deferred purchases would be carried out in 2025.
This move echoes a similar measure taken last year when, in response to Western sanctions, the central bank halted dollar purchases from August 10 through the end of 2023 to prevent the ruble’s sharp depreciation.
The recent ruble downturn follows expanded Western sanctions and rising geopolitical tensions. Last week, the US imposed further restrictions on Russia’s financial sector, including sanctions on Gazprombank, the nation’s third-largest bank, which processes key energy export payments.
Analysts suggest that a weaker ruble benefits Russia’s budget, as revenue from energy exports in dollars and euros yields greater returns when converted to the domestic currency. Finance Minister Anton Siluanov also highlighted on Tuesday that a weaker ruble supports exporters, offsetting the impact of the central bank’s high benchmark interest rate.
