Russia’s central bank said it would not intervene in currency markets following a sharp drop in the value of the rouble, playing down the impact on the currency of new U.S. sanctions.
Volatility on Russian markets has soared since Washington imposed fresh sanctions on April 6, targeting some of Russia’s biggest companies and most prominent businessmen to punish Moscow for its alleged meddling in the 2016 U.S. election and other “malign activity”.
The rouble plunged more than 10 percent versus the dollar last week to its weakest level since late 2016, before recovering slightly to close down 6 percent on the week .
The sharp devaluation prompted market speculation that the central bank would start buying up the Russian currency to support its value, but Deputy Governor Ksenia Yudayeva said on Monday it had no plans to do so.
“The situation on the currency market is balanced,” she said at a financial conference in Moscow.
“We do not intervene in the market situation if there is simply volatility on the market or a sharp change in the (rouble) rate, we intervene only if there are risks to financial stability.”
Yudayeva said the increased market volatility did not currently represent a risk to financial stability and that the situation was more stable than in 2014, when the United States first hit Russia with sanctions over Moscow’s role in the Ukraine crisis.
The central bank has all the necessary tools to deal with market risks, she added.
The promised announcement of yet more U.S. sanctions over Moscow’s support for Syrian President Bashar al-Assad weighed on the rouble and Russian stocks on Monday.
Re-disseminated by The Asian Banker from Reuters