Last Wednesday, the Central Bank of Russia made an announcement. They will now be putting more focus on selling Forex lots. So they will be increasing sales considerably, by nine times. They will make this move gradually from September 14th to the 23rd. According to analysts and investors, the intention is likely to avoid a further drop in the ruble’s value.
Overall, its intention is to sell 150 billion rubles, which equates to roughly 1.5 billion USD right now. This would mean the sale of over 21 billion rubles each day, up from the previous 2.3 billion rubles.
Central Bank’s Forex Sales Expansion
The bank declared its intention to sell a total of 150 billion rubles’ worth of Forex during that period, translating to 21.4 billion rubles per day, a significant increase from the previous 2.3 billion rubles.
They likely want this move to help pay off Russian eurobonds worth $3 billion in total with these Forex lots. Those holding the eurobonds can, therefore, gain rubles with this transaction. They can then convert these rubles into the foreign currency of their desire.
They hope this move of a greater rate of selling their currency will do a few things according to them. Firstly, it should help them lower the volatility in their market, and it may also be able to meet extra demand.
We already saw them making moves before now to help support their currency. In the middle of August, on the 15th, they raised their interest rate by 350 bps (or otherwise Forex pips). This was in response to the ruble hitting a worryingly low value, worth over $101. If we look at the forex patterns, we see that we have not seen such a high price since the start of the Ukraine war last year. They seemed to indicate that another interest rate hike was possible in the middle of September 15th.
