Central Bank buys dollars to contain decline in dollar rate

The weighted-average exchange rate fell by RUR0.04 to RUR31.47 per dollar at the end of the morning trading session for the US dollar on Monday, July 29. Commercial bank experts believe that the strengthening of the ruble could have been more substantial, if the Central Bank had not been buying dollars. They remarked on the fact that the Central Bank had been buying dollars at the level of RUR31.47 per dollar to prevent the weighted-average rate at the Unified Trading Session from dropping below that level. The experts linked the decline in the dollar rate at the end of July to massive sales of dollars by banks at their clients' request. They pointed out in an interview with RBC that as the end of the month was approaching, clients of banks had begun to face serious problems with ruble liquidity, and they had to sell US dollars because of a deficit of rubles.

The experts added that the interest rates for one-day credits in Rubles reached a very high level of 35% at noon on the first business day of the week.

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