Russian Ruble Tumbles: Central Bank Halts Foreign Currency Buys

Russia's central bank halts foreign currency purchases to reduce financial market volatility as the ruble weakens significantly. Sanctions, especially against Gazprombank, are cited as major factors. Russia battles rising inflation, high interest rates, and economic shifts amid constraints in the global currency market.

Russia's central bank announced it will stop purchasing foreign currency to ease financial market pressure, as the ruble weakened past 110 to the U.S. dollar, declining sharply since August. The halt begins Nov. 28, continuing until 2025, with the aim of reducing market volatility, according to a bank statement.

The decision comes amidst sanctions-related challenges, affecting Gazprombank's ability to facilitate currency exchanges, and contributing to the ruble's decline. Economists and analysts suggest the move may only moderately stabilize the ruble, while Russia's economy faces rapid inflation and a volatile stock market.

Russia's economy reflects overheating signs due to wartime adjustments. Real wages rose, but the labor force shrinks, adding pressure. High benchmark interest rates, coupled with unprecedented sanctions, create economic instability as the country navigates new trading dynamics using rubles and non-Western currencies.

(With inputs from agencies.)