Russian Rouble Dips amid Stabilizing Currency Trade

The Russian rouble weakened against the dollar after the central bank confirmed that currency trade had stabilized following sanctions against the Moscow Exchange. The shift to over-the-counter trading increased volatility initially, but the central bank reports a normalization. The rouble also saw shifts against the yuan and euro.

The Russian rouble weakened against the dollar on Wednesday, following the central bank's announcement that over-the-counter currency trade had stabilized after sanctions hit Russia's primary stock exchange in June. As of 0730 GMT, the rouble was 1.05% weaker at 87.50 to the dollar.

Sanctions on the Moscow Exchange and the National Clearing Centre (NCC) increased volatility and broader spreads when trading moved to the over-the-counter (OTC) market on June 14, making reliable pricing for the Russian currency harder to come by. In its financial risk report, the central bank noted that the currency market situation had "significantly normalized," citing strong foreign currency sales by exporters, which reached $14.6 billion in June, only 2% less than in May.

The central bank's report also mentioned that the transition to a new exchange rate mechanism, where the rouble's official rate is now set based on OTC market rates, had minimal short-term effects. The rouble remained stable against the yuan at 11.95, despite the yuan trade volumes hitting records due to the sanctions. On June 19, the yuan trade reached 509 billion roubles ($5.82 billion) at the Moscow Exchange, accounting for 99.6% of all trade volumes. The rouble also weakened by 1.8% to 95.23 against the euro, and Brent crude oil, a global benchmark, was down 0.6% to $84.1 a barrel.