The ruble hits a 7-week low against the USD.

The ruble fell to 100 rubles per US dollar this afternoon, touching this important psychological threshold for the first time since mid-August.

Earlier this afternoon, the Russian ruble briefly fell to 100.25 rubles per US dollar, its lowest level in seven weeks. Currently, the currency has recovered, rising to 99.58 rubles per US dollar.

The ruble also rose 0.6% against the euro and remained stable against the yuan. Currently, one euro is equivalent to 104.2 rubles. One yuan is worth 13 rubles.

The last time the ruble surpassed 100, the Russian Central Bank had to urgently raise interest rates by 350 basis points (3.5%) to 12%. Russian officials also discussed reimposing capital controls to support the domestic currency.

"The 100 mark isn't a technical resistance level. It's a significant psychological barrier. Right now, all predictions are that the ruble will depreciate," said Alexei Antonov, an analyst at Alor Broker.

The ruble has been steadily weakening against the US dollar over the past year. Chart: Reuters — The ruble has been steadily weakening against the US dollar over the past year. Chart: *Reuters*

The ruble is usually under pressure at the beginning of the month. This is because the end of the month is when export companies convert their foreign currency earnings into domestic currency to pay taxes.

"Rising oil prices and higher interest rates will improve the outlook for the ruble in the medium term," analysts at Promsvyazbank said. They forecast the ruble will continue to surpass the 100 ruble to one dollar mark unless authorities take new supportive measures.

Last month, the Russian central bank raised interest rates again to 13%. According to a Reuters survey, with inflationary pressures remaining high, the central bank will continue to tighten policy at its upcoming meeting on October 27.

The ruble has been highly volatile since the Russia-Ukraine conflict erupted in February 2022. Last March, the ruble hit a record low, with 120 rubles to one US dollar. But just a few months later, the currency surged to a seven-year high against the ISD, thanks to Russia's capital controls and soaring export revenues.

This year, declining exports (partly due to Western sanctions and a shift in global trade flows) and a rebound in imports have weakened the ruble. The current account surplus for the first eight months of the year also fell by 86% compared to the same period last year, to $25.6 billion.

Ha Thu (according to Reuters)

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