By Gleb Bryanski and Elena Fabrichnaya
MOSCOW (Reuters) – The Russian ruble recovered above 100 against the U.S. dollar to trade at 99.50 on Friday after a decree by President Vladimir Putin that opened new payment options for European buyers of Russian gas, helping to ease foreign currency flows be resumed.
The ruble strengthened 1.5% against the dollar, over-the-counter data from banks showed. The rate also rose 2.4% to 13.57, recovering above 14, against the Chinese yuan in trading on the Moscow stock exchange.
Putin’s decree meant that European buyers of Russian gas, including Hungary and Slovakia, who previously used Gazprombank for their transactions, could now convert their currency into rubles at other banks not covered by sanctions.
The US sanctions imposed on Gazprombank on November 22 disrupted the Russian currency market, leading to a 15% decline in the ruble’s exchange rate against the dollar.
The Russian currency is now on track for its best week in four months, suggesting the market has adjusted to the sanctions. The ruble has been weakening since August 6, the first day of the Ukrainian invasion of Russia’s Kursk region.
Russian Finance Minister Anton Siluanov directly linked the problems with energy payments and US sanctions on Gazprombank to the ruble’s weakness. He said the volatility will disappear once a solution to the payments is found.
“Our participants in foreign trade are finding ways to settle scores with their colleagues abroad, so I think another week and everything will be fine,” Siluanov was quoted as saying by Russian media on December 5.
Analysts and traders shared this view, saying Putin’s decree unlocked energy payments, boosting Russia’s currency.
“Previously stalled large export earnings, which were stuck due to new banking sanctions, may have been ‘unblocked’ and have now entered the already very thin market,” said a forex trader at a major Russian bank, who asked not to be identified . , told Reuters, explaining the reasons for the ruble’s rise.
Putin said this week that up to 90% of Russia’s foreign trade is now in rubles and currencies of “friendly” countries such as the Chinese yuan. However, some importers still needed dollars and euros, creating domestic demand for both currencies.
Russia’s sanctioned largest lenders, including state-controlled Sberbank, can no longer hold and trade dollars in euros because they cannot have correspondent accounts in the US and Europe and are cut off from the international SWIFT system.
