Moscow reveals reasons behind weakening ruble

The Russian currency has tumbled to a three-week low amid a changing balance of trade, the Finance Ministry has said

The latest weakening of the ruble is mostly due to changes in the country’s trade balance, Russian Finance Minister Anton Siluanov said on Monday in an interview with TASS news agency. 

On Monday, the Russian currency fell 1.16% to 92.77 against the US dollar, marking the weakest level against the greenback in three weeks. Last week, the ruble was trading in a narrow band near 90 against the dollar. 

“The weakening of the ruble is due primarily to the trade balance – the inflows and outflows of currency into and out of the country,” Siluanov said, noting that demand for foreign currency is higher in the summer holiday season. 

The minister added that some analysts attribute the ruble’s drop to the latest sale of foreign businesses in Russia and the outflow of foreign currency abroad. However, he stressed, the Finance Ministry and the Central Bank had previously agreed that the volume of currency withdrawal from the sale of these businesses cannot exceed $1 billion per month. “Thus, this [sale of foreign businesses] is not critical for the currency market,” the minister said. 

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Siluanov also noted that export prices for energy were high in 2022, while imports declined. 

“Now imports have recovered, while prices for exported goods are below last year’s level, especially when it comes to gas,” he explained, adding that they were at times five times higher than the current levels in 2022. 

Earlier this month, the head of the Bank of Russia, Elvira Nabiullina, said that decreased exports and increased imports were the key reason for the ruble exchange rate drop in June and July.

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