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The Bank of Russia a record spent on supporting the ruble

Банк России рекордно потратился на поддержку рубля

The Central Bank of Russia for Monday, April 20, sent to support the ruble exchange rate more than $222 million, which was the daily record since the beginning of the intervention in the spring of 2020.

In terms of rubles, the regulator was thrown into the exchange 16.8 billion rubles, RBC reports.

We also recall that the Russian national currency since the beginning of this year has significantly depreciated against the dollar and the Euro. Strong pressure on the rouble had a General panic in the financial markets due to the rapid spread of the pandemic coronavirus infection COVID-19 and concerns about its impact on the global economy, and a collapse in oil prices.

Thus, a strong devaluation of the Russian currency occurred on March 7 on the international Forex market, after the day before the deal collapsed OPEC+, — countries of the Alliance are unable to agree on cutting oil production, nor of the extension of the deal for a longer period (1 April 2020). Then, on March 9, 2020, the financial and oil markets suffered “black Monday”, and on 18 March, the market embraced a “black Wednesday” with yet another collapse of oil prices, the Russian national currency in the course of trading on the Moscow stock exchange has updated (at the time) a record low against the dollar and Euro since February of 2016, 81 and 88 million, respectively.

Last week, the Bank of Russia submitted a review that was recorded by active purchases of foreign currency in the Russian financial market that caused a sharp devaluation of the ruble in March.

As noted in the materials of the regulator, “in the foreign exchange market non-residents and subsidiaries of foreign banks bought the currency”. “Together in March of this category of participants of foreign currency bought on the stock exchange on 389,4 billion rubles that is a record indicator for the last several years”, — stressed in the Central Bank.

“The observed behavior of non-residents due to the increased volatility of the ruble, and the General trend of the weakening of the currencies of the countries of the EME (emerging market — ed.) against the backdrop of slowing global growth and oversupply in the oil market,” pointed out Bank of Russia.

In this regard, in the framework of the budget rules, the regulator “has suspended the purchase of foreign currency and implement proactive sales”. Sale by the Bank of Russia of foreign currency “helped to mitigate the negative impact of the sharp fall in oil prices on the inflow of foreign currency in the current account balance,” the review says.

In General, the Central Bank stated, “the situation on the Russian financial market in March reflected a global process of market reaction to the spread of the pandemic coronavirus infection and the lack of confidence in the conclusion of a new agreement to limit production on the oil market.”

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