Russian Ruble Falls as Currency Controls are Introduced

November 6, 2014 Share Print 2

Russia’s central bank effectively abandoned the trading corridor for the ruble on Wednesday, halting big interventions that had seen it spend billions a day to prop up a currency driven lower by sanctions and falling oil prices.

The bank announced it would limit daily interventions to just $350 million a day, saying this would mean the currency’s price would now largely be set by the market, although it stopped short of formally abolishing the trading corridor.

The ruble, which has already lost almost a quarter of its value since the middle of this year, promptly fell by around 1.5 percent against the dollar on Wednesday.

Plunging oil prices and Western sanctions over the Ukraine crisis have shriveled Russia’s exports and investment inflows, driving the currency down.

via CNBC

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Alfonso Esparza

Senior Currency Analyst at Market Pulse

Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.