Russian Ruble will continue to drop and US dollar strengthens

[Moscow Times] The Russian currency’s decline has also been underwritten by the Central Bank’s move towards a free floating currency, which it aims to implement fully by 2015.

While the Central Bank conducted enormous interventions in March to prop up the ruble as the Ukraine crisis worsened, it has been entirely passive in recent weeks.

The current trading corridor, which has been moved 42 times this year, is so wide that the Central Bank will not be obliged to intervene until a dollar is worth about 39 rubles, economist Tikhomirov said.

Data on the regulator’s website shows that it has not made any interventions on the currency markets since June, the longest such period since before the 2008 economic crisis.

“The 38.00 mark doesn’t look unachievable next week against the background of the lack of an initiative to exit from the [Ukraine] crisis either from Russia or Europe,” Evgeny Koshelev, an analyst at Rosbank, wrote in a commentary published by Prime Economic News Agency.

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