The Bank of Russia suspended the purchase of foreign currency on the domestic market | News from Germany about Russia | DW

The Russian Central Bank has suspended the purchase of foreign currency on the domestic market from 15:00 Moscow time on Monday, January 24. The decision was made as part of the implementation of the fiscal rule mechanism “in order to increase the predictability of the actions of the monetary authorities and reduce the volatility of financial markets,” the Russian regulator said on the same day.

The decision to resume buying foreign currency on the domestic market will be made taking into account the situation on the financial markets, the statement says. The regulator also said that it has enough tools to prevent a threat to financial stability.

The ruble fell significantly after the NATO announcement

On the same day, the exchange rate of the Russian ruble collapsed to multi-month lows. In the middle of the day, against the backdrop of NATO statements about the transfer of additional forces to Eastern Europe, the US dollar was worth 79.12 rubles, which was the highest since November 2020. After the announcement of the Central Bank of the Russian Federation, the ruble exchange rate stabilized somewhat.

The West suspects Moscow of intent to invade Ukraine and threatens Moscow with unprecedented sanctions in the event of such an invasion, pointing to data indicating the deployment of up to 100,000 Russian troops near the borders of Ukraine. The Kremlin denies preparations for war and, for its part, demands guarantees from NATO that Ukraine will not be admitted to the North Atlantic Alliance. He considers Moscow’s demand unacceptable.

See also:

• Infographic: How Much Russia, the US, and Germany Spend on Defense

  A quarter of spending is on defense

  In 2016, Russia spent 3 trillion 889 billion rubles ($60.82 billion) on defense. This is almost a quarter of all Russian budget expenditures. In Germany and the United States, this share is much smaller – 11% and 15%, respectively.

• 

  Infographic: How Much Russia, the US, and Germany Spend on Defense

  Double the cost

  Russia’s total spending on defense, national security and law enforcement in 2016 amounted to 5 trillion 832 billion rubles (in terms of $91.5 billion). This is more than double Germany’s similar spending of $44.7 billion.

• 

  Infographic: How Much Russia, the US, and Germany Spend on Defense

  Defense and secret spending in priorities

  Despite the decline in defense spending and secret spending in 2017, they remain among the largest expenditure items in the Russian budget. The bulk of secret spending usually falls under the item “National Defense”. But, as experts note, in 2017 an unusually large share of closed expenses fell on such areas as the national economy, health care and even periodicals.

  Author: Irina Filatova, Mikhail Bushuev