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Russian central bank says extra financial measures will aid rouble
December 17, 2014 / 3:06 PM / 3 years ago

Russian central bank says extra financial measures will aid rouble

MOSCOW (Reuters) - The Russian central bank said on Wednesday it would take additional financial measures to speed stabilization of the rouble.

The bank said in a statement that, together with the government, it was preparing a set of measures to provide, if necessary, additional capital to Russian banks and financial companies.

It also said it planned to hold additional foreign exchange auctions if necessary and would impose a temporary moratorium on revaluing banks’ portfolios of securities.

The announcement came after a volatile few days for the rouble, which was down earlier this week by as much as 20 percent against the dollar and is down by some 50 percent against the U.S. currency so far this year.

The central bank raised its key interest rate early on Tuesday by 650 basis points, an unprecedented move which ultimately failed to support the rouble.

The bank’s new measures are aimed at easing concerns among Russian companies over approaching debt payments, the central bank First Deputy Governor Ksenia Yudayeva said.

“These measures are intended to balance supply and demand on the foreign exchange market, which will help stabilize the rouble rate more quickly,” she said in emailed comments.

The rouble extended its daily gains by more than 2 percentage points after the statement, trading 6.7 percent up at 63.19 against the dollar at 1050 ET.

“At least the Russian authorities have figured out that letting your currency drop 10 percent one day, more or less 20 percent the next peak to trough ... might not be such a good idea in terms of financial security ... and are finally beginning to join up the dots, and think collectively, to try and re-assure markets,” Timothy Ash, head of emerging market research at Standard Bank in London, said in a note.

Reporting by Elena Fabrichnaya, Alexander Winning and Lidia Kelly; Writing by Lidia Kelly, editing by Elizabeth Piper

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