MOSCOW (Reuters) – The Russian ruble weakened further on Thursday, remaining at its lowest level against the U.S. dollar since October 2023.
LSEG data showed the ruble fell 0.4% to 97.40 against the dollar at 0740 GMT. On Wednesday, the ruble reached 97 for the first time since October last year.
The ruble fell 1.29% against the yuan to a one-year low of 13.65, according to LSEG data. In trading on the Moscow Stock Exchange (MOEX), the ruble fell 0.18% against the yuan to 13.71.
“The ruble has once again reached annual lows; the fall in the national currency rate is almost 15%,” say BCS broker analysts.
Analysts have pointed to several factors behind the ruble’s current weakness, including the October 12 expiration of the US Treasury Department’s Office of Foreign Assets Control (OFAC) license allowing commercial banks to transact with MOEX.
The license was issued to allow banks to end their operations with MOEX following the June 12 imposition of Western sanctions on the exchange and its clearing agent, the National Clearing Center.
The sanctions halted all dollar and euro trading at MOEX, making the Chinese yuan the most traded foreign currency in Russia. Trading in dollars and euros has moved to the over-the-counter (OTC) market, obscuring price data.
There are concerns in the market that Chinese banks that provide RMB liquidity for exchange trading may withdraw for compliance reasons once OFAC’s license expires.
Analysts and traders say other factors putting pressure on the ruble include weaker oil prices in August-September, exporters suspending foreign exchange due to problems with international transactions, and an enhance in cross-border settlements in rubles.
Increased state sales of foreign currency in October are supporting the Russian currency, but it is not enough to offset downward pressure, analysts say.
One-day ruble-dollar futures contracts, which are listed on the Moscow Stock Exchange and serve as an indicator for OTC market rates, remained unchanged at 96.54. The official central bank rate, calculated on the basis of OTC data, was set at 96.95 per dollar.
The ruble fell 0.42% to 106.55 against the euro, LSEG data showed.
the global benchmark for Russia’s main export, rose 0.67% to $77.07 per barrel.
