The Central Bank of Russia named the reasons for the weakening of the ruble

In November, the ruble weakened due to new U.S. sanctions against Russia's financial sector, as well as due to the actions of Russian companies that bought foreign currency to repay obligations to Russian credit companies. This follows from the financial markets risk review prepared by the Central Bank (CBR) of Russia on December 10.

"Sanctions against the financial sector, which affected the infrastructure of international settlements and the timing of export proceeds, as well as purchases of foreign currency by some non-financial companies led to a temporary decrease in net sales of foreign currency by major exporters in November by 23% to $ 8 billion. Against this background, volatility in the foreign exchange market increased in late November and accelerated the pace of weakening of the ruble," the document says.

It was also noted that the weakening of the Russian currency was affected by changes in market expectations regarding the key rate and the escalation of geopolitical tensions.

According to the Central Bank of Russia, the ruble "sagged" against the U.S. dollar by 11% and 8.4% against the Chinese yuan for a month, writes "Gazeta.Ru".

To correct this situation, the Central Bank put on pause the purchase of foreign currency until the end of 2024 in the domestic market, but soon continued its sales.

"In early December, the situation in the foreign exchange market stabilized. From December 1 to 7, the ruble strengthened by 7.7% against the U.S. dollar, having fully recovered the weakening of late November and returned to the level below November 21 (on December 7 was 99.42 rubles per U.S. dollar)," the review said.

The Central Bank has stopped buying foreign currency and stopped the weakening of the ruble. What it means

Earlier, on November 21, the United States imposed sanctions against First Deputy Chairmen of the Bank of Russia Vladimir Chistyukhin and Dmitry Tulin. In addition, restrictions were imposed on the heads of several departments of the Bank of Russia. The U.S. sanctions lists were added to 16 individuals and more than 90 structures. In addition, December 2, the White House said that the current administration intends to impose new sanctions against Russia before the resignation at the end of January.

On the same day, Finance Minister Anton Siluanov said that Western sanctions will not lead to restrictions on Russia's foreign trade. According to him, all restrictions by Western countries first of all hit them. The next day, on November 22, Kremlin spokesman Dmitry Peskov said that Russia was considering retaliatory measures to the U.S. sanctions against Gazprombank.

On November 27, Mikhail Zeltser, a stock market expert at BKS Investment World, explained to Izvestia that the ruble exchange rate declined under the influence of several factors, including the increased demand for foreign currency and the geopolitical situation that has escalated in recent weeks.

Western countries have increased sanctions pressure on Russia after the start of the special operation to protect civilians in Donbass, which was announced on February 24, 2022.