Russian President Vladimir Putin on Monday expressed confidence the ruble, which has lost nearly a quarter of its value so far this year, would soon stabilise as the central bank said it would intervene only if "financial stability" was threatened.
The Bank of Russia said Friday it was ready to step in to protect the crashing ruble, after the currency was hammered by a day of panic selling. The ruble lost 10 percent in value last week alone amid plunging oil prices and the fallout from the Ukraine crisis.
Then on Monday the central bank announced that it was removing the range it had fixed for the currency up to now and allowing it to evolve freely on the market.
The Russian strongman blamed speculation for the currency's volatility, insisting that it was "absolutely" no reflection of the country's economic situation. "We can see speculative moves in the exchange rate, but I think that will end very soon, given the actions taken by the central bank in response to the speculators," said Putin in Beijing where he is attending the Asia-Pacific Economic Cooperation (APEC)summit.
The Bank of Russia, which has been planning to shift to inflation targeting like central banks in the West, had progressively enlarged the range for the ruble thereby limiting its possible interventions over the past year.
But the ruble has fallen as Western sanctions on Russia over its role in the Ukraine crisis have led to a surge in capital flight from the country.
The Bank of Russia said in a statement Friday that it spent $30 billion in October to keep the ruble afloat, vowing to spend more if needed "as well as use other financial instruments at its disposal."
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