To stop the devaluation of the ruble, Russia suspended purchases of foreign currencies – lanacion.com (Argentina)

With the ruble at its lowest in more than four months, the Central Bank of Russia decided to suspend purchases of foreign currency to replenish international reserves in the country, a move that could pave the way for a fifth interest rate cut this year.

“The Bank of Russia has repeatedly stated that minimize the impact of operations to replenish international reserves in the currency market to quickly adjust the volume of shopping, “said today the body through a statement, and claimed that the decision in terms of” increased volatility in the domestic currency market. “

In the text, the Central Bank states that the foreign exchange purchases fell to $ 160 million last Monday from 200 million per day that were negotiated last week, according to the newspaper El Pais.

The suspension from yesterday Cart foreign currencies had an immediate impact on the Russian economy, the ruble appreciated 1.4%, slowing devaluation, at a time when the major currencies of emerging countries suffer from the volatility of Chinese stocks and the expectation that the Reserve Federal and Bank of England rate rise in September.

Interventions, aggravated by a drop in oil prices, the Russian currency have plunged more than 17 percent since the central bank resumed purchase of foreign currency in mid-late May. Since then, it acquired about 10,000 million dollars in foreign exchange, says the Bloomberg financial agency.

The depreciation of the ruble, which fell more than 40% last year, is good news for Russian foreign competitiveness amid lower oil prices and the impact of economic sanctions of the European Union the government of Vladimir Putin, although it is a problem to settle debts in currencies other than the ruble.

“The Central Bank is concerned that a weaker currency could jeopardize its inflation target,” said Ivan Tchakarov, economist at Citigroup Inc. in Moscow, which predicts a decline in the rate of half a point, according to Bloomberg. “With this decision in place, the central bank much more comfortable cutting it feel on Friday,” he added, referring to the advice of the Central Bank of Russia to assess its policy interest rates. .