The value of the ruble continued to fall this Monday, August 14 in the morning, at the opening of the Moscow Stock Exchange. It took more than 100 rubles for 1 dollar and 110 for 1 euro, a level as low as in March 2022, when the Russian currency collapsed following the outbreak of war in Ukraine. Faced with this situation, the Russian Central Bank will hold a crisis meeting on Tuesday.
The effect of European economic sanctions? The value of the ruble continued to fall this Monday, August 14 in the morning, at the opening of the Moscow Stock Exchange. It took more than 100 rubles for 1 dollar and 110 for 1 euro, a level as low as in March 2022, when the Russian currency collapsed following the outbreak of war in Ukraine.
Faced with this delicate situation, the Russian Central Bank (BCR) indicated on Monday via a press release that a “meeting of the Board of Directors will be held to examine the question of the level of key rates”. Over the past few weeks, inflation (+4.3% in July) has again hit the Russian population, which in the spring of 2022 had experienced monster inflation (+17%), resulting from European economic sanctions and considerable cuts hydrocarbon sales.
A lever for the BCR
To counter this catastrophic situation for the economy, the Russian Central Bank (BCR) was forced to raise its key rate to 8.5% on July 21st. Clearly, this action allows the Russian Central Bank to curb bank loans in particular, which will be more difficult to obtain and less advantageous for the population, and by extension to limit inflation.
However, this weakening of the ruble will have a positive effect on state reserves. Indeed, exchanges in euros or dollars will allow Moscow to replenish its coffers with Russian currency.