The Russian currency continued to fall on Wednesday as ruble trading resumed on the Moscow stock exchange. But in an effort to stop the currency’s decline, Russia’s central bank issued an order further restricting access to US dollars.
The Central Bank of Russia said on Wednesday that owners of foreign exchange accounts at Russian banks should only withdraw up to $10,000 in dollars (regardless of the currency in the account), and the rest should be withdrawn in rubles. New foreign currency accounts can be opened, but only rubles may be withdrawn. The order will be in effect until September 9, the central bank said. Until then, banks cannot sell foreign currencies to Russians either.
The measures appear to be aimed at curbing the ability of Russian citizens to convert their rubles into dollars or other currencies as the central bank tries to support the national currency, which is quickly losing its purchasing power.
The Russian ruble has lost about 40 percent of its value against the US dollar this year as Western leaders cut the country from the global economy with sanctions in response to Ukraine’s invasion. Those measures, including the freeze on the Russian central bank’s assets held in the United States, will make it more difficult for the country to keep its currency afloat.
Since currency trading on the Moscow stock exchange was on Friday, the United States and Britain said they would stop importing Russian oil, while the European Union drafted a plan to reduce its reliance on Russian energy, and Fitch Ratings said a default on Russia’s sovereign debt “threatened”.
“Continuing to step up sanctions and proposals that could restrict energy trade increases the likelihood of a policy response from Russia that includes, at the very least, selective default on its sovereign debt obligations,” Fitch Ratings said on Tuesday.
The ruble traded at 117 rubles against the US dollar in Russia on Wednesday, after closing at 105 rubles against the US dollar on Friday. Trading in rubles in the global foreign exchange markets, which was very limited, cost the ruble about 136 per US dollar.
Trading on the Moscow stock exchange is still at a standstill, according to the central bank. It was last traded on February 25.
