Russian Central Bank Says Float Has Cooled Speculators

The head of Russia’s central bank defended on Tuesday its decision to float the rouble, saying it had restricted speculative attacks on the currency and the country’s financial markets were resilient to a slump in oil prices.

The central bank has been under intense pressure to stem a slide in the rouble, which has fallen almost 30 percent against the dollar this year as oil prices have plummeted and sanctions over the Ukraine crisis have locked Russian firms out of international capital markets.

Since floating the rouble earlier this month, the bank has emphasised it reserves the right to carry out large, ad hoc interventions to defend the currency – a warning Governor Elvira Nabiullina reiterated.

“A floating exchange rate allows to reduce speculative pressure on the rouble, which has played a far from minor role in the currency’s recent slide,” she told the lower house of parliament.

“We have warned market players that we are ready to come out with unexpected interventions if events develop negatively. In these conditions, speculative strategies become far more risky.”

via Reuters

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Alfonso Esparza

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.
Alfonso Esparza