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RUSSIA CENTRAL BANK MOVES TO SUPPORT RUBLE

Published by Gbaf News

Posted on November 8, 2014

1 min read
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Central Banks foreign exchange Trading monetary policy

Central Bank Acts Amid Ruble Decline

MOSCOW (AP) – Russia’s central bank has moved to stop the national currency’s nosedive by saying it stands ready to intervene in markets.

The ruble plummeted to an a new low of 48.7 rubles a dollar Friday before bouncing back on reports about the bank’s emergency board meeting. After the bank issued its statement, the currency stabilized at around 46.4 rubles a dollar.

Bank Explains Currency Support Strategy

In the statement, the central bank defended its decision earlier this week to dial back its support for the currency, which was costing it millions, sometimes billions, of dollars a day.

Commitment to Future Market Interventions

At the same time, it voiced Friday its readiness to increase market interventions and use other instruments to prevent the ruble from plunging further.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Key Takeaways

  • The Russian central bank intervened after the ruble plunged to 48.7 per dollar, prompting an emergency board meeting.
  • Following the bank’s commitment to act, the ruble stabilized at approximately 46.4 to the dollar.
  • The central bank defended earlier reductions in support due to high daily intervention costs, while signaling readiness to ramp up use of tools if needed.

Frequently Asked Questions

Why did the ruble plunge so sharply?
The ruble plummeted due to a combination of market pressure and speculative trading, pushing it to a new low of 48.7 per dollar before intervention.
What actions did the central bank take?
It convened an emergency board meeting and stated its readiness to increase interventions and deploy other tools to stabilize the currency.
Did the intervention work?
Yes, after the statement, the ruble stabilized at approximately 46.4 per dollar, showing immediate impact.

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