The Russian Central Bank has halted foreign currency purchases as the ruble approaches 100 per US dollar.

 

The Bank of Russia has decided to cease buying foreign currency on the domestic market for the remainder of 2023 in order to strengthen the ruble, which has plummeted to its lowest level in 16 months.

The move comes at a time when the ruble has lost around 24% of its value this year. The Russian rouble, along with the Turkish lira and the Argentine peso, is one of the three worst-performing currencies.

On Wednesday, the ruble rose above 98 per dollar and is approaching 100 per dollar, a figure last seen in March 2022.

The Bank of Russia also published data showing a drop in the country's current account surplus, which is the difference between exports and imports. The surplus fell to $25.2 billion in the first seven months of this year, down from $165.4 billion in the same time last year. The excess was $1.8 billion in July alone, down from $17.8 billion the prior year.

The head of the central bank, Elvira Nabiullina, has stated that the fundamental cause for the ruble's depreciation is worsening global trade circumstances. She has, however, ruled out any measures to strengthen the currency.

Because of higher government expenditure, decreasing oil income, and Russians opting to invest in accounts outside the country, the ruble's value has nearly halved from its peak last year.

According to the most recent data, leading Russian exporters sold 84% of their overseas revenues in the local market in June. However, their revenues, which are a major source of finance for Russia, fell to $6.9 billion in July, down from $16.8 billion the previous year.

While Russia continues to acquire things from other nations, there are limits to how much Russia can export, particularly when it comes to oil.

There is also an artificial cap on the price of oil, making it more difficult for Russia to pay its military operations. Furthermore, the quantity of money entering Russia is decreasing, even as the country boosts its foreign commerce in rubles.