The Russian ruble today weakened at the Moscow foreign exchange market to the lowest ever recorded exchange rate against the euro, as the Russian central bank weakened the defense of the domestic currency, allowing it to devalue 11 times in the past six weeks. The ruble exchange rate fell by 1.3 percent, reports Tanjug.
Since the beginning of the financial crisis and the drop in oil prices, the Russian central bank has avoided a stronger devaluation of the ruble and resorts to small steps of frequent depreciation adjustments, which according to some analysts only worsens the situation. Instead of calming the market, such a policy only intensifies speculation about the next move of the Central Bank. According to analysts at Commerzbank, writes the Financial Times, significant devaluation of the ruble can no longer be avoided. With the current approach, however, the Central Bank will have to continue to ‘pump’ huge amounts from foreign exchange reserves into the market to defend the ruble. (Tanjug, G.J.)
