MOSCOW (Reuters) – The Russian rouble continued to slide, dropping to its lowest since March 2022 against both the dollar and the yuan, and the finance minister indicated the government did not object to the currency’s weakness, an advantage for exporters.
The rouble hit 14.5 against China’s yuan for the first time since March 2022. And by 0930 GMT, the rouble was down 0.8% at 104.85 against the dollar, according to LSEG data, a fresh low since March 2022, the first month of the Ukraine war.
The rouble crossed the 110 mark against the euro.
During the session, the rouble hit 105.79 against the dollar and 111.07 against the euro.
In a rare official comment on the exchange rate, Finance Minister Anton Siluanov said that Russia’s weak rouble was benefiting exporting companies, offsetting the negative impact of the central bank’s high benchmark interest rate.
“I am not saying whether the exchange rate is good or bad. I am just saying that today the exchange rate is very, very favourable for exporters,” Siluanov told a financial conference in Moscow.
Siluanov’s remarks are the first admission from a senior government figure that Russian authorities, at least for the moment, do not object to the exchange rate’s weakness.
“The key thing is that the exchange rate is more important for exports than the interest rate,” Siluanov added.
The rouble’s official exchange rate, set by the central bank using over-the-counter data, for the first time since March 24 crossed the 103 mark and was set at 103.79 to the dollar.
Analysts said the recent U.S. sanctions against Gazprombank, the main bank servicing Russia’s energy sector, disrupted some payments for energy exports for the coming months, contributing to the rouble’s weakness.
The disruption created a shortage of foreign currency in the domestic market and raised costs for international transactions. Some analysts forecast the rouble would hit 110 to the U.S. dollar before the end of the year.
The dollar rally following the U.S. election also contributed to the rouble’s slide. One-day rouble-dollar futures, which trade on the Moscow exchange and are a guide for OTC market rates, were down 0.2% to 104.73.
The Russian currency is expected to receive some support this week from sales of foreign currency by exporting companies ahead of tax payments.
Brent crude oil, a global benchmark for Russia’s main export, was up 0.7% to $73.52 amid chances for a possible ceasefire in the Middle East.