The regulator will suspend its operations on the foreign exchange market to reduce ruble volatility

The Bank of Russia announced on Wednesday it will suspend purchases of foreign currency on the domestic exchange from November 28 until the end of the year, to reduce market volatility.

The announcement came as the Russian currency slid to near-record lows, reaching 114 rubles against the US dollar on Wednesday.

The regulator also said it will continue to sell foreign currency to replenish the National Wealth Fund. The volume of such operations currently amounts to 8.4 billion rubles ($74 million) per day, according to the central bank’s statement.

A decision on when to resume foreign currency purchases will be based on “the situation on the financial markets,” the regulator stated.

The Bank of Russia took a similar step last year in wake of Western sanctions, suspending dollar purchases from August 10 until the end of the year to stop the sharp weakening of the ruble.

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Ruble takes major dive against dollar

The deferred dollar purchases will be made during 2025, the regulator added.

The latest ruble slide comes in the wake of the latest Western sanctions and growing geopolitical tensions. The US expanded restrictions on the Russian financial sector last week, hitting the country’s third-largest bank Gazprombank, which plays a key role in processing payments for energy exports.

Experts say a weak ruble will help the Russian government prop up the budget. Much of the revenue generated from energy exports comes in dollars and euros, which now bring a bigger return in domestic currency.

Russia’s Finance Minister Anton Siluanov said on Tuesday that a weak ruble is also benefiting exporting companies, offsetting the negative impact of the central bank’s high benchmark interest rate.