Bryanski’s soil
MOSCOW (Reuters) – There is apparently a novel rule in Russia: don’t mention war in the context of the ruble.
Russian media and analysts from state banks have not commented on a possible connection between the 9 percent depreciation of the ruble against the US dollar and Ukraine’s surprise attack on Kursk Oblast.
The ruble’s decline began on August 6, the first day of the attack – the largest foreign attack on the territory of sovereign Russia since World War II.
Currency traders who spoke to Reuters (requesting anonymity due to the sensitivity of the situation) said the main sellers of the Russian currency were foreign banks.
The ruble hit a 10-month low against the dollar and its lowest level against the yuan since June 24 in the Aug. 13 session. State banks attributed the decline mainly to economic factors.
Analysts at state-owned Sberbank, by far Russia’s largest bank, blamed the US sanctions imposed on the Moscow Stock Exchange on June 12 and restrictions on currency sales by exporters.
“Exporters may have reduced the volume of currency sales in recent days. This is due to the fact that the requirements for mandatory currency sales have become more lenient, and the tax and dividend periods have come to an end,” Sberbank said in a note.
FINANCIAL SHIELD
The Russian central bank has remained quiet on the ruble’s decline. The Russian government did not respond to a request for comment.
Leading Russian business media reported on the devaluation of the ruble but did not link it to the Kursk attack.
Analysts quoted by business portal RBC attribute the decline to reduced exports and lower requirements for the sale of foreign currency by exporters.
This information was also absent from the main Russian news programs and talk shows, as well as from the websites of state media.
The refrain from linking the ruble’s fall to events taking place just 530 km (330 miles) southwest of Moscow shows Russia is making efforts to keep bad economic news from reaching the wider public.
Russia is trying to portray its $2 trillion economy as an increasingly invincible fortress of self-sufficiency that faces massive pressure from Western sanctions, the toughest ever imposed on a major economy.
“Our finances are strong,” Finance Minister Anton Siluanov said in a speech on Wednesday.
“It is important for us to build this financial shield so that any financial pressure that anyone wants to exert on us is reversed… This is what is happening now,” Siluanov said.
One trader, who wished to remain anonymous, suggested that the weighty selling of the ruble in recent days may also be related to the planned suspension of foreign transfers by Austrian Raiffeisen Bank.
As the ruble began to rebound on Wednesday, some analysts tried to ignore any connection between the attack and the ruble’s decline, while others predicted it would soon stabilize.
Economist Mikhail Belyaev said that linking the currency’s depreciation to the attack on Kursk was an approach that “in my opinion… has nothing to do with reality.”
