The Russian central bank (CBR) this morning widened the rouble trading band by another 30 kopecks. Market participants immediately drove the rouble to the (new) weak end of the trading band, with the RUB/basket going from 30.70 to 31.00 - a roughly 1% weaker RUB - before closing a little stronger (RUB/basket 30.87). The CBR last widened the trading band two weeks ago - see Flash Comment - Russia: Devaluation process initiated, 11 November 2008 - and today's move implies that the Russian authorities realise the need for a weaker rouble given that Ural oil prices are moving below USD 45 a barrel.
Flash Comment
Russia: Gradual rouble devaluation is wrong strategy
Tue, Nov 25 2008, 10:01 GMT
by
Lars Rasmussen
- Danske Bank A/S
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