Russian Rouble Rebounds Amidst Central Bank Currency Strategy

The Russian rouble bounced back after a sharp decline, as Russia's central bank announced it would halt foreign currency purchases to stabilize markets. Despite initial gains against the dollar and yuan, volatility remains due to recent U.S. sanctions on major Russian banks.

The Russian rouble experienced a rebound on Thursday, recovering from a steep 7% drop against the U.S. dollar after the central bank intervened to stabilize the markets. By 0845 GMT, the rouble had risen by 2.60%, trading at 110.20 to the dollar, the weakest level since March 2022, the first month of the Ukraine conflict, according to bank data.

In an effort to bolster the currency, Russia's central bank announced it would halt foreign currency purchases domestically starting November 28 until the year's end, postponing these actions to 2025. On the same day, the rouble gained ground against China's yuan, reaching 14.60 per the Moscow Stock Exchange.

Analysts from the BCS brokerage suggest the central bank's strategic pause in foreign currency procurement has initiated this market turnaround. However, they warn that high volatility may persist. This strategic move contrasts with the tumultuous foreign currency trading, influenced by Western sanctions on Moscow's exchange earlier this year, marking a shift in trading dynamics predominantly managed by non-sanctioned Russian banks.

(With inputs from agencies.)