Page 78 - RusRPTNov20

The increase in uncertainty weakened the ruble in September. ​Although the world market price of crude oil remained reasonably stable over the past summer, general uncertainty about the situation in emerging economies weighed on the external value of the ruble.
The ruble has lost some 30% of its value year to date as of the end of October, making it one of the worst performing currencies in the world.
In September, the ruble was also weighed down by falling crude oil prices and numerous geopolitical concerns. The situation in Belarus and the poisoning of opposition politician Alexei Navalny have increased the likelihood of new sanctions against some Russian actors. In addition, the conflict between Armenia and Azerbaijan over the rule of Nagorno-Karabakh and, most recently, the unrest that followed the presidential elections in Kyrgyzstan, have increased uncertainty about the development of the whole region and also of Russia. In addition, not only the US presidential elections are imminent, but also the presidential elections in Tajikistan and Moldova and the parliamentary elections in Georgia.
At the end of September, the ruble-dollar exchange rate weakened to close to 80 rubles, while the ruble-euro exchange rate fell to a record low of more than 90 rubles. To calm the situation, the central bank announced on September 29 that it would carry out additional currency sale operations for 185bn rubles in October-December.
The operation is based on the conversion of the proceeds from the sale of the majority stake in Sberbank into rubles. In addition, a few large state-owned companies such as Alrosa and Rosneft have reported receiving instructions from the state-owned company to reduce their currency positions to the October 2018 level. The last time similar guidelines were used to support the ruble exchange rate at the end of 2014. Following the decisions, the ruble-dollar exchange rate has remained reasonably stable in recent days.
The Central Bank of Russia (CBR) and the Finance Ministry will increase the daily currency interventions to RUB11bn ($140mn), ​Vedomosti d​ aily reported on October 6.
As reported by ​bne IntelliNews,​ in September the ruble fell to its lowest level since April ​on mounting political risk fears​. In September ruble lost 7.6% and became the worst performing EM currency. Although neither the ministry not CBR officially attribute the new Fx interventions to ruble support, they will sell RUB5.3bn and RUB5.7bn daily as of October 1 and October 7, respectively. The Finance Ministry estimated that under the current "budget rule" the missing oil and gas revenues that are compensated via Fx interventions from the National Welfare Fund in September-October stands at RUB127bn. The
78 ​RUSSIA Country Report​ November 2020 www.intellinews.com