The ruble is falling from its highs as the Russian Central Bank reduces the key rate from 14 % to 11 %.
On Thursday, the ruble fell from a four-year high, and the Russian central bank cut its key interest rate by three percentage points to 11% and hinted that it might cut it again at its next meeting.
The CBR said it was reacting to a “significant slowdown in the current pace of price increases,” which was not what it had expected.
The bank said that “somewhat” looser capital controls were possible because inflation and expectations about its future path had slowed down. However, it didn’t announce any new steps on Thursday.
At the start of Russia’s war in Ukraine, the CBR put strict limits on the number of rubles that could be changed into foreign currency. This made people and businesses rush to get dollars and euros. In the last two weeks, it has eased some of the limits it put on the hedging activities of the banking system, but most of the limits on non-financial entities are still in place.
By 4:15 a.m. ET (8:15 a.m. GMT), the dollar was worth 60.47 rubles, up 2.4%. It had dropped as low as 55.83 rubles earlier in the week, which was its lowest point since February 2018. From its lowest point during the initial panic caused by the war, the ruble’s value has now gone up by 100%.
