MOSCOW, April 10 (Reuters) – Russian exporters cut their sales of foreign currency during the first days of April, contributing to a significant weakening in the value of the Russian rouble, the central bank said on Monday.
The Russian currency fell more than 5% last week to hit its lowest level in almost a year.
After spending much of last year as the world’s best-performing currency, the rouble has suffered after the West imposed fresh sanctions on Moscow’s crucial oil exports in the shape of an oil price cap and an EU embargo on Russia’s sea-borne crude exports at the end of last year.
“There has been a temporary reduction in sales of foreign currency earnings by exporters, which led to an acceleration of the weakening of the ruble in early April,” the bank said in a monitoring report published on Monday.
Russian exporters are required to convert chunks of their foreign currency earnings into roubles to meet month-end tax payments and to comply with Russia’s strict capital controls.
The central bank said Russian individuals and companies had responded to the weakening of the rouble by increasing their sales of foreign currency.
The bank also said it had seen a significant jump in interest in the Chinese yuan – which is challenging the U.S. dollar as the most important foreign currency in Russia – with Russians buying 41.9 billion roubles worth of yuan in March, up from 11.6 billion during February.
Trades involving yuan on Russia’s foreign exchange markets accounted for 39% of overall volumes, the bank said, compared to 34% for the rouble-dollar currency pair.
The United States and European Union imposed sanctions designed to cut Russia’s access to dollars and euros, including by kicking several of the largest banks off the SWIFT financial communications networks, after Moscow sent tens of thousands of troops into Ukraine last February.
Moscow has since moved to embrace the Chinese currency and is encouraging firms and individuals to move away from Russia’s decades-long reliance on the U.S. dollar as their go-to foreign currency.
Reporting by Elena Fabrichnaya; Writing by Jake Cordell; Editing by Jan Harvey and Christina Fincher
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