The ruble continues to decline towards the 100 per dollar mark, but the Russian government is not in a hurry to stabilize it, as a weak ruble is beneficial for the budget ahead of the expected increase in government spending next year.
Sanctions have severely restricted access to foreign currency, and companies are struggling to receive payments from China and Turkey. The Central Bank has changed the method of calculating the exchange rate, and trading in dollars and euros on the Moscow Exchange has been halted.
The weakening of currency controls, including the reduction of the mandatory conversion of export earnings to 25%, has exacerbated the ruble’s decline. As a result, major exporters have reduced their currency sales by 30%.
The ruble has also weakened against the yuan, the main currency for settlements after the sanctions were introduced. The exchange rate fell by 11%, reaching 13.26 per yuan.
The Central Bank may raise interest rates again to curb inflation, which is currently more than double the target of 4%.
