The ruble collapsed!

According to Xinhua News Agency in Moscow, the Central Bank of Russia announced on the 27th that it will suspend the purchase of foreign exchange in the domestic market from the next day until the end of this year. 

The Russian Central bank said on the same day that from the 28th of this month to the end of the year, the central bank will stop buying foreign exchange in the domestic market within the framework of budget rules to reduce volatility in the financial market, and the delayed foreign exchange purchase plan will be implemented in 2025. In addition, the central bank will continue to conduct foreign exchange sales in the domestic market linked to the national welfare Fund. 

Earlier on the 27th, the Russian ruble saw panic selling. In the international foreign exchange market, the Russian ruble fell below 110 to 1 against the dollar and the ruble fell below 115 to 1 against the euro, both reaching the lowest level since March 2022. The ruble has fallen more than 12 percent against the dollar and more than 13 percent against the euro since Thursday, according to brokerage China. 

It is worth mentioning that after the Russian central bank announced the suspension of foreign exchange purchases, the ruble began to strengthen. 

The main reason for the accelerated decline of the ruble in this round, on the one hand, or related to the recent sanctions imposed by the US Treasury on Russian financial institutions and officials. According to CCTV news, on November 21 local time, the Office of Foreign Assets Control (OFAC) of the US Department of the Treasury issued a statement announcing sanctions against Gazprom Bank, more than 50 small and medium-sized Russian banks, more than 40 Russian securities institutions and 15 Russian financial officials. 

On the other hand, according to analysts quoted by brokerage China, the market is increasingly worried about the escalation of the conflict between Russia and Ukraine.