Dollar Surges Past 80 Rubles on Forex as Russian Central Bank Currency Sales Fall

The US dollar briefly climbed above the psychological level of 80 rubles on the Forex market on Tuesday, reflecting a noticeable weakening of the Russian currency.

Dollar Breaks Key Psychological Level

According to data from Investing, the dollar reached a peak of around 80.43 rubles, marking an increase of more than two percent during trading.

This level had last been seen on January 9. By 13:45 Moscow time, however, the exchange rate stabilized at approximately 78.84 rubles.

At the same time, the euro traded at around 91.77 rubles.

Reduced Currency Sales by the Central Bank

The movement in the foreign exchange market came amid a sharp reduction in foreign currency sales by the Central Bank of Russia.

Because of an upcoming revision of the budget rule, the Russian Finance Ministry has stopped transferring funds to the regulator for sale on the exchange.

Between February 6 and March 5, daily sales amounted to about 16.52 billion rubles. Now the volume of such operations has fallen roughly fourfold and will remain reduced for an indefinite period.

Debate Over Optimal Dollar Rate

Despite the weakening of the ruble, some financial experts believe the current exchange rate is still not high enough.

The head of VTB Bank, Andrey Kostin, previously stated that the optimal exchange rate for the US currency would be within a range of 90 to 100 rubles.

According to Kostin, such a rate would increase export revenues flowing into the state budget and help partially offset the growing fiscal deficit.