Russia appears to be steadfast in moving towards a more open economy and a free-floating exchange rate, despite the pressures of fluctuating oil prices and a generally volatile global situation. The ruble came under pressure in August and September 2011, as investors engaged in a flight to safety and sold ruble assets. But the Russian central bank preferred to let the exchange rate take the hit rather than intervene massively in the markets.
The view among analysts appears to be that this approach is ultimately more effective because it dampens expectations of further interventions to come. Economist Evgeny Gavrilenkov of brokerage Troika Dialog says in an October report: “The [Russian] central bank’s activity on the foreign exchange market was very moderate: it only tried to smooth daily volatility and did not play against market trends. Thus, the ruble is currently in a ‘dirty’ floating regime. Given the current oil price and low inflation, we believe the Russian currency has depreciated too much and it could well bounce back in the fourth quarter.”
