Russia: Rouble continues to weaken
October 10, 2011
By 30 September, the Russian rouble (RUB) had depreciated 9.5% in nominal terms over the previous month and traded at RUB 31.88 per USD. The September depreciation followed a 4.1% drop in August and marked the fastest monthly depreciation since January 2009. In addition, the end-of-month reading marked the lowest level at which the RUB was traded since May 2009. As a result of the monthly drop, the rouble has now depreciated an accumulated 4.4% versus the USD this year and, at the current level, is trading 4.6% weaker than in the same month last year The rouble depreciated as prices for Ural oil, Russia's main export commodity , moderated amid deteriorating prospects for the global economy, with a probable decline in oil demand going forward. In an attempt to prevent faster depreciation, the Central Bank of Russia (CBR) has intervened by selling USD in the foreign exchange market since August. According to a 5 October statement by Central Bank President Sergey Ignatiev, the CBR had already sold USD 8.0 billion during September and a further USD 1.15 billion at the beginning of October. The CBR sees the rouble stabilizing going forward. On 10 October, Ignatiev stated that the RUB will more likely appreciate than depreciate in the coming months if oil prices remain at the current levels.
Author: Armando Ciccarelli, Head of Data Solutions