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. Last Updated: 07/27/2016

Ruble Drops to 24.48 On Brisk Dollar Sales




The ruble, after holding steady for about a month, dropped 19 kopeks to 24.48 against the U.S. dollar on Tuesday as traders eagerly snapped up dollars after the American holiday weekend.


Trade for "today" and "spot" deals, on which the ruble rate is based, was closed Monday because of the U.S. Independence Day holiday.


The Central Bank blamed the currency's slide on speculation over PricewaterhouseCoopers audit of the bank's activities in 1996, Prime-Tass reported. The Central Bank, accused of misusing state reserves, said Monday that the audit had cleared it from any wrongdoing.


However, Alfa-Bank trader Alexei Bukleyev said it was unlikely that the audit, which has not yet been officially made public, had played a role in the ruble's drop because the market players had already made up their minds that it would not implicate the bank.


At the Moscow Interbank Currency Exchange trading session Tuesday the ruble dropped to a low of 24.6 before making a slight recovery to 24.5 in the late afternoon, Itar-Tass reported.


Denis Dzerzhinsky, a trader with Moscow Business Bank, said that even though the ruble was weakening, he expected it to stay within the corridor of 24 to 25 rubles to the dollar, at least until the end of the week as promised by Central Bank chief Viktor Gerashchenko .


Other traders, however, were convinced that the market would correct itself over the next two days and the ruble would firm up by a few kopeks.


Bukleyev said it did not appear that the Central Bank had intervened very aggressively in MICEX trading Tuesday, instead letting traders quench their thirst for dollars.


Since Friday, the Central Bank has sold only $200 million to support the ruble,which has slipped 27 kopeks against the dollar over that time period, he said.


Traders said the Central Bank was under pressure to protect its currency reserves so it was allowing the ruble to slowly devalue.