The ruble price fell to 100 rubles per dollar this afternoon, reaching this important psychological level for the first time since mid-August.
Earlier this afternoon, the Russian currency fell to 100.25 rubles per dollar, a seven-week low. It has since rebounded to 99.58 rubles per dollar.
The ruble also rose 0.6% against the euro and was steady against the yuan. One euro is now worth 104.2 rubles. One yuan is worth 13 rubles.
The last time the ruble broke the 100 mark, the Russian Central Bank had to raise its key interest rate by 350 basis points (3.5%) to 12%. Russian officials also discussed reimposing capital controls to support the currency.
"The 100 mark is not a technical resistance. It is an important psychological barrier. Right now, all predictions are that the ruble will lose value," said Alexei Antonov, an analyst at Alor Broker.
The ruble has been steadily weakening against the US dollar over the past year. Chart: Reuters
The ruble is usually under pressure at the beginning of the month, as the end of the month is when exporters convert foreign currency earnings into local currency to pay taxes.
“Rising oil prices and higher interest rates will improve the outlook for the ruble in the medium term,” analysts at Promsvyazbank said, predicting the ruble will continue to surpass 100 per dollar unless authorities introduce new support measures.
Last month, the Russian Central Bank raised its benchmark interest rate to 13%. With inflationary pressures still high, the central bank is likely to tighten policy further at its next meeting on October 27, according to a Reuters poll.
The ruble has been volatile since the Russia-Ukraine conflict broke out in February 2022. Last March, the ruble hit a record low of 120 rubles to the US dollar. But just a few months later, the currency hit a seven-year high against the ISD, thanks to capital controls and soaring Russian export revenues.
This year, falling exports (partly due to Western sanctions and a reorientation of global trade flows) and rising imports have weakened the ruble. The current account surplus in the first eight months of the year also fell 86% from a year earlier to $25.6 billion.
Ha Thu (according to Reuters)
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