In Russia, there seems to be a new rule: Don’t talk about the war over the ruble.
Russian media and state-controlled bank analysts have remained largely silent on the possible link between the ruble’s 9% drop against the US dollar and Ukraine’s surprise attack on the Kursk region.
The fall of the ruble began on August 6, the first day of the attack, the largest by a foreign power on Russian sovereign territory since World War II.
Currency traders who spoke to Reuters on condition of anonymity because of the sensitivity of the situation said foreign banks are the main sellers of Russian currency.
The ruble reached its lowest level in 10 months against the dollar and its lowest level against the yuan since June 24 during the August 13 session. State-owned banks attributed the fall mainly to economic factors.
Analysts at state-owned Sberbank, by far Russia’s largest bank, blamed US sanctions on the Moscow stock exchange, imposed June 12, and reduced foreign exchange sales by exporters.
“Exporters may have reduced the amount of their foreign exchange sales in the last few days. This is due to the fact that the requirements for mandatory foreign exchange sales have become more relaxed, and tax and dividend periods have ended,” a Sberbank said in a note.
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The Russian central bank remains silent on the fall of the ruble. The Russian government did not respond to a request for comment.
The main Russian business media reported the fall of the ruble, but did not link it to the Kursk attack.
Analysts cited by economic news portal RBC attributed the fall to declining exports and reduced needs of exporters for foreign exchange sales.
The news was also absent from major news broadcasts and talk shows on Russian state television, as well as state media websites.
The lack of connection between the fall of the ruble and the events taking place 530 km south-west of Moscow shows Russia’s desire to prevent the bad economic news from reaching the general public.
Russia is working to present its $2 trillion economy as an increasingly invisible bastion of self-sufficiency that is resisting the massive pressure of Western sanctions, the most punitive ever imposed on a major economy.
“Our finances are strong,” Finance Minister Anton Siluanov said in a speech on Wednesday.
“It is important for us to build this financial shield so that all the financial pressures that people want to put on us will be affected. […]. This is exactly what is happening now,” said Mr. Siluanov.
One trader, who spoke on condition of anonymity, suggested that the intense ruble selloff of the past few days could also be linked to an impending end to overseas money transfers by Austrian banks.
As the ruble began to rebound on Wednesday, some analysts tried to dismiss any connection between the attack and the ruble, while others predicted that the ruble would stabilize soon.
According to economist Mikhail Belyaev, linking the currency devaluation to the Kursk invasion is an approach “in my opinion… that has nothing to do with reality.” (Reporting by Gleb Bryanski; Editing by Guy Faulconbridge and Jan Harvey)