The Central Bank assessed for the first time the impact of new US sanctions on the ruble

“In November, the United States imposed blocking sanctions on another 52 banks, causing increased volatility in the foreign exchange market. <...> The new restrictions required adjustments in the service of foreign trade flows. As demonstrated by previous sanctions episodes, the restrictions create infrastructure problems for foreign economic activity,” the document says.

However, the sanctions affect the ruble in the short term and “in the medium and long term, the dynamics of the exchange rate is determined by fundamental factors,” the Central Bank added.

According to the leadership of the regulator, the measures taken now are sufficient to stabilize the exchange rate, Vice President of the Bank of Russia Philip Gabunia said at a press conference. He highlighted that the Central Bank has a “sufficient arsenal of measures” to respond to short-term volatility.

The US Treasury imposed sanctions against Gazprombank, state corporation Dom.RF, BCS Bank and other Russian credit institutions on November 21. In total, about 100 companies and individuals are on the US department’s list.

After the restrictions were introduced, the ruble began to fall. At the high of November 27, in the Forex currency market, the dollar rose above 114 rubles, and the euro – above 120 rubles. On the same day, the Central Bank announced that it would not buy foreign currency in the domestic market until the end of 2024 to “reduce volatility.”

The ruble reacted with a correction. On Friday, November 29, at 16:50 Moscow time, the dollar on Forex was worth 106 rubles, and the euro was 111.9 rubles. The Central Bank set the official dollar exchange rate on November 29 at 109.58 rubles, the euro exchange rate at 116.14 rubles.