Article Hero

Russian Rouble falls on eased capital control

1649679623.png
Miguel A. Rodriguez
Miguel A. Rodriguez
11 April 2022
Russia’s currency weakened at the beginning of the week following the central bank’s decision to temporarily relax the capital control measures meant to limit a drop in the currency

On the opening in Moscow, the Rouble fell to 82.09 against the US Dollar, from the 71 Rubles hit on Friday – the strongest since Nov 11.

The reading comes after, on Friday, the central bank announced that it would scrap a 12% commission for buying foreign currency through brokerages from April 11 and lift a temporary ban on selling foreign exchange cash to individuals from April 18. Also, the finance ministry said that it wouldn’t borrow from local or foreign debt markets this year.

On Monday, Finance Minister Anton Siluanov stated that Russia would take legal action if the West tried to force the country to default on its sovereign debt. "Of course, we will sue because we have taken all the necessary steps to ensure investors receive their payments,” Siluanov said. "We will present in court our bills confirming our efforts to pay both in foreign currency and in rubles. It will not be an easy process. We will have to very actively prove our case, despite all the difficulties," he added.

Russia faces the first sovereign external default in more than 100 years after arrangements to make an international bond payment in Rubles earlier last week, even though the payment was due in US Dollars. Russia has not defaulted on its external debt since its 1917 revolution. Still, given the ongoing geopolitical situation, its bonds have emerged as a flashpoint in its economic struggle with Western countries.

At the moment of writing, the Russian Rouble was trading at 80.94 against the US Dollar and at 88.47 against the Euro.

Sources: finance.yahoo.com, reuters.com

This information/research prepared by Miguel A. Rodriguez does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. The research analyst primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views and consequently any person acting on it does so entirely at their own risk.The research provided does not constitute the views of KW Investments Ltd nor is it an invitation to invest with KW Investments Ltd. The research analyst also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report.The research analyst in not employed by KW Investments Ltd. You are encouraged to seek advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit that conforms to your specific investment objectives, financial situation, or particular financial needs before making a commitment to invest. The laws of the Republic of Seychelles shall govern any claim relating to or arising from the contents of the information/ research provided. 

Share this article

How did you find this article?

Awful
Ok
Great
Awesome

Read More

Miguel A. Rodriguez
Miguel A. Rodriguez
Financial Writer

Miguel worked for major financial institutions such as Banco Santander, and Banco Central-Hispano. He is a published author of currency trading books.