By Gleb Bryanski and Elena Fabrichnaya
MOSCOW (Reuters) – The Russian ruble bounced back past 100 to the U.S. dollar, trading at 99.50 on Friday, following a decree by President Vladimir Putin that opened up new payment options for European customers of Russian gas, allowing foreign currency flows to resume.
The ruble strengthened 1.5% against the dollar, according to over-the-counter data from banks. It was also up 2.4% at 13.57, going back past 14, against trading on the Moscow stock exchange.
Putin's order meant that European buyers of Russian gas, including Hungary and Slovakia, which previously used Gazprombank for their transactions, could convert their money into rubles in other, non-controlled banks. – bonds.
US sanctions imposed on Gazprombank on November 22 disrupted the Russian foreign exchange market, leading to a 15% drop in the ruble exchange rate against the dollar.
The Russian currency is now on track for its best week in four months, suggesting the market has adjusted to the sanctions. The ruble has been weakening since August 6, the first day of Ukraine's invasion of Russia's Kursk region.
Russian Finance Minister Anton Siluanov linked problems with energy payments and US sanctions against Gazprombank to the weakness of the ruble, saying the volatility will disappear as soon as a solution for payments is found.
“Our foreign trade partners are finding ways to settle accounts with their counterparts abroad, so I think another week and everything will be fine,” said the media Russia that Siluanov said on December 5.
Analysts and traders shared this view, saying that Putin's order to loosen energy payments has boosted the Russian currency.
“Previously stagnant large export revenues, which were stuck due to new banking sanctions, may have been 'unfettered' and have now hit the market, which is already very thin,” said a forex trader at a major Russian bank, who declined to be identified. , to Reuters, explaining the reasons for the rise of the ruble.
Putin said this week that up to 90% of Russia's foreign trade was now in rubles and currencies of 'friendly' countries such as the Chinese yuan. However, some importers still needed dollars and euros, creating domestic demand for both currencies.
Russia's biggest lenders, including state-controlled Sberbank, cannot hold dollars and trade in euros because they cannot have correspondent accounts in the US and Europe and they are cut off from the international SWIFT system.
Many Russian banks have been importing large amounts of dollar and euro currency from third countries at least through 2023 to serve their clients in case they want to buy foreign currency.
However, many Russian banks, including local subsidiaries of Austria's Raiffeisen, Hungary's OTP and Italy's UniCredit, were not subject to sanctions and could use SWIFT.
Such banks were central to the Russian market in dollars and euros, which became completely over-the-counter after sanctions against the Moscow Stock Exchange in June, which made the yuan the most traded foreign currency in Russia.
The CEO of Sberbank, German Gref, said that the fair value of the ruble is in the range of 100-105 to the US dollar, adding that he did not expect more dramatic exchange rate fluctuations for now.
“Today we do not expect any surprises with this. It changes according to the situation. And at the moment, we do not see any place for a significant weakening of the ruble,” said Gref at the bank depositor's day.
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