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Ruble floats freely

November 10, 2014

Russia's central bank has announced it has scrapped its daily controls on the value of the ruble. The battered national currency is thus allowed to float freely on financial markets earlier than originally planned.

https://p.dw.com/p/1Dk2Y
Russian ruble banknotes
Image: picture-alliance/ITAR-TASS

The Bank of Russia on Monday removed the range it had fixed for the ruble, allowing the currency to evolve freely on the market.

The lender said it would stop setting daily limits for the ruble's fluctuations and had no urgent obligation to intervene in financial markets to support the currency.

The bank made the move as the ruble had come under sustained pressure in the face of Western sanctions and plummeting oil prices. Speaking on the sidelines of an APEC summit in China, Russian President Vladimir Putin insisted, though, that speculation was behind the ruble's current weakness against the dollar rather than being a reflection of the country's economic situation.

Ruble up on the news

The central bank had been eating through its hard currency reserves, spending $30 billion (24 billion euros) last month alone in a bid to prop up the ruble. But despite those efforts and frequent interest hikes to entice investors with higher returns, the currency had kept falling.

Following Monday's announcement, the ruble was up almost 4 percent after hitting a record low of 48 rubles to the dollar last week.

Bank of Russia chief Elvira Nabiullina warned, though, the regulator would resume intervening in the amount necessary to fend off threats to financial stability and counter speculative demand.

hg/sgb (AFP, AP, Reuters)