Russian Central Bank brings dollar and euro back to March 2016 level

Russian Central Bank brings dollar and euro back to March 2016 level

This weekend and Monday official euro exchange rate increased by 98.77 kopecks, reaching 80.3562 rubles. Dollar exchange rate increased by 77.81 kopecks and reached 69.028 rubles, the Bank of Russia reported.

Earlier, it was reported that euro and dollar reached highs level of two and a half years. Exchange rate of American currency grew to 69.2 rubles (highest level since April of 2016), while European currency reached 80.52 rubles (highest level since March of 2016)

Increased volatility in Russian financial markets is associated with "infection effect" from Turkey and Argentina, as well as with Washington's intention to impose new sanctions against Moscow, the Central Bank's Department of Research and Forecasting informed.

As Chairman of the State Duma Financial Market Committee, Anatoly Aksakov, noted in an interview with Vestnik Kavkaza, devaluation of the ruble this week was associated with negative statements made by the UK. "I think that this is the result of previous statements and actions due to which speculative investors decided to withdraw funds from Russian assets. They react not only to the US statements, but also to the statements of Theresa May, who found support in a number of Western countries," he noted.

"We're obviously being told that the West is going to continue its policy against Russia. That's why speculative investors are withdrawing funds from Russian assets. In turn, it affects actions of the Central Bank of Russia, that's why it raised the dollar and euro rates so high," he explained.

As the leading researcher of the Center for the Study of Central Banks of RANEPA, Pavel Trunin, also linked devaluation of the ruble this week to sale Russian securities and continuation of the West's sanction rhetoric.

"News regarding the Sripal case, plus very unstable situation in all emerging markets affected current state of Russian financial market. In August, people mostly talked about Turkey and Argentina, but in recent days there are more and more talks about unstable situation in South Africa and India. This affect many emerging markets, including Russia, and these factors will continue to affect current situation for some time," he stressed.