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Screenshot of a breaking news alert e-mail from Q2 2017
Russia’s currency has hit its lowest level ever against the U.S. dollar as the risk of new Western sanctions threatens more economic hits. The European Union said Saturday it was preparing to issue new sanctions as soon as this week in response to signs that Russia had sent troops into Ukraine. The ruble has declined by about 13 percent this year. One dollar will now buy you about 37.5 rubles.
Other notes on the ruble:
– Reuters reported on Tuesday that cutting Russia off from SWIFT, a key global interbank messaging service, had been taken off the table as too radical.
– Amidst the upheaval, Russia’s Central Bank is preparing to let the ruble float free, likely leading to a short-term inflation hike and further devaluing the currency, financial analysts said Tuesday.
– The Russian currency was at 42.7 rubles in the dual-currency euro-dollar basket the Central Bank uses to monitor the ruble’s value, close to the 43.3 ruble historical maximum set in March. The Central Bank said it would start buying currency to support the ruble if it weakened to 44.4 rubles to the basket.
– In an article published Tuesday in monthly economics magazine Voprosy Ekonomiki (Economic Questions), Central Bank first vice-president Ksenia Yudayeva said the regulator will go ahead with plans to scrap concept of a interventions-supported trading corridor within which the ruble is allowed to trade and instead turn to inflation targeting starting from 2015.
– Under inflation targeting, the Central Bank wants to instead regulate inflation like other advanced economies by modifying its key lending rates while allowing the domestic currency to float freely on the market.