Ruble Eases Off Highs as Russian Central Bank Cuts Key Rate to 11% Vs 14%
2022.05.26 11:46
By Geoffrey Smith
Investing.com — The ruble eased off a four-year high on Thursday, the Russian central bank cut its key rate by three percentage points to 11% and flagged the possibility of further cuts at its next meetings.
The CBR said it was reacting to a “significant slowdown in the current pace of price increases,” which had gone beyond its expectations.
The bank said that the easing of inflation and of expectations for its future course had allowed it to relax capital controls “somewhat,” but didn’t announce any fresh measures on Thursday.
The CBR had put strict limits on the amount of rubles that could be converted into foreign currency at the start of Russia’s war in Ukraine, which triggered a broad rush for dollar and euro by both households and businesses. While it has relaxed the controls it placed on the banking system’s hedging activities in the last two weeks, the limits on non-financial entities remain largely in place.
By 4:15 AM ET (0815 GMT), the dollar was up 2.4% at 60.47 rubles. Earlier in the week, it had fallen as low as 55.83 rubles, its lowest since February 2018. The ruble has now doubled in value from its low during the initial war-driven panic.
