Russia says it will halt foreign currency purchases and launch a digital ruble to keep the currency from spiraling further
Aug 10, 2023, 12:01 PM EDT
- Russia is scrambling to keep its ruble from falling further in value.
- The nation’s central bank announced it would stop foreign currency purchases through the end of 2023.
- It has also begun to pilot program for a digital ruble in an attempt to prop up its currency.
Russia is halting its purchases of foreign currencies, and is launching a digital version of its ruble as it scrambles to prevent its currency from spiraling even further as war drags on in Ukraine.
The nation will no longer purchase currencies on the global market from August 10 through the end of the year, Russia’s central bank said in a statement on Wednesday. It will, however, continue to sell foreign currencies located in its sovereign wealth fund worth up to 2.3 billion rubles or $23 million dollars a day, which it has been using to help fund its war against Ukraine.
In a separate statement, the central bank added it had begun pilot testing a digital version of the ruble, which it has planned to do since July to prop up its weakening currency.
The digital ruble will be tested with a limited number of clients across 13 banks, though the Russian central bank aims to launch the currency for public use by 2025.
The moves are part of Russia’s efforts to prop up its weakening economy, with the ruble recently plunging to its lowest level since Russia began its invasion of Ukraine in 2022. The nation has been slammed by sanctions which have slashed Moscow’s energy revenue.
In July, the ruble blew past a key “comfort zone” for the Kremlin in the aftermath of Wagner’s short-lived rebellion, sparking concern as Russia’s purchasing power in international markets grew weaker.
Russia’s currency slipped further on Thursday, trading at 97 to the US dollar. That’s about a 30% decline from what the ruble was worth in January, making it one of the worst-performing currencies this year.
Source: Markets Insider
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