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. Last Updated: 07/27/2016

Ruble Rebounds in Year's Biggest Jump

The ruble rebounded by 45 points against the U.S. dollar Friday in its biggest one-day jump this year, closing at 2,415 per dollar in what dealers called a natural correction after the previous day's fall.


"The ruble plummeted beyond its real value Thursday," said Tokobank dealer Stanislav Chernyakov, referring to the Russian currency's 125-point dive to 2,460 per dollar. He said that the Central Bank, which had completely pulled out of the market Thursday, bought about $80 million Friday to keep the ruble from bouncing back too far.


"But for the Central Bank's intervention, it would have risen to 2,395," he said.


Initial supply of $261 million far exceeded demand for $101 million, said Vadim Yegorov, spokesman for the Moscow Interbank Currency Exchange, where the trading took place. Chernyakov said that Tokobank had intended to sell $10 million, but had only managed to get rid of $1.5 million.


Alexander Potemkin, head of the Central Bank's foreign operations department, confirmed Friday that the Central Bank had altered its policy on the hard-currency market Thursday, allowing a drop in the ruble-dollar rate to a new, more sustainable level.


He told Itar-Tass that the move had been precipitated by a surge in demand for dollars in August.


"We saw that the policy of gradually lowering the rate was starting to contradict the preservation of a high-enough level of gold and currency reserves," he said. "We realized that an urgent movement in the market was needed to find a new point of equilibrium for the rate. And so, on September 22 we effectively stopped selling hard currency to support the ruble."


Businesses, which have put more faith in the ruble this year due to the currency's relative stability, had mixed reactions to the ruble's two-day roller-coaster ride.


"We are not only losing money, we are losing customers," said Ludmila Kirpichova, financial director of the GUM department store. She estimated that the store had lost 150 million rubles ($62,000) Thursday before it managed to change its prices.


But Imdad Haque, local president of the major import retailer Global USA, said he was not worried about changes in the ruble rate, since his shop automatically changes the ruble prices of its goods in accordance with the rate at the exchange.