Russia's central bank announced that it will suspend purchasing foreign currency from the domestic market for the remainder of 2023 in a bid to boost the value of the ruble. The ruble has already fallen to a 16-month low against the US dollar, with the dollar nearing 100 rubles. The central bank stated that this decision is aimed at reducing market volatility. However, it will continue to sell foreign currency from the sovereign wealth fund, Wellbeing, at a rate of 2.3 billion rubles per day.
The ruble has depreciated by about 24% against the dollar this year, making it one of the top three worst-performing emerging market currencies, along with the Turkish lira and the Argentine peso. The central bank's move comes as data revealed that Russian citizens increased their deposits in foreign banks by over 0.5 trillion rubles in June, the largest increase since December last year. As of June 30, Russia's foreign exchange reserves reached 6.4 trillion rubles ($66 billion). George Vaschenko, Deputy Head of Research at Freedom Finance Global in Astana, noted that the psychological threshold of 100 rubles per dollar could soon be reached and predicted that the ruble's depreciation trend will not stop.