Russia reconsiders buying foreign currencies as oil prices rise to a certain level
The Governor of the Russian Central Bank, Elvira Nabiullina, announced that the bank will reconsider its policy on buying foreign currencies if oil prices rise to the range of $88-90 per barrel.
This announcement comes after the Russian Central Bank stopped buying foreign currencies until the end of this year, as this step was considered a way to avoid the deterioration of the ruble, which witnessed a sharp decline in August and September.
The Russian ruble has largely recovered since that period, stabilizing at a level of around 92 rubles to the dollar.
Nabiullina explained that the bank’s decision to purchase foreign currencies will depend largely on the level of oil prices.
Nabiullina indicated that the central bank will continue selling foreign currencies next January, and the volume of sales will be announced in due course.
It’s noteworthy that the Russian ruble was greatly affected by the deteriorating economic conditions and Western sanctions.
In another context, a decision was issued by Russian President Vladimir Putin last October requiring exporters to return 80% of foreign currency revenues, a measure that continues until March 2024 with the aim of achieving stability in the ruble.
Nabiullina indicated that this measure is considered temporary, and no severe impact on the Forex market will be expected with its expiration.
Nabiullina said that the central bank will need two to three months to verify that the inflation rate continues to decline in a sustainable manner before considering any additional steps regarding reducing interest rates.
