MOSCOW - The battered U.S. dollar continues its downward trajectory at the Russian currency exchange today, shedding of 14 kopeks to close at RUR28.99. This is just one kopek below the psychological mark of 29 rubles, the lowest exchange for the dollar in Russia since May 2001.
Today’s landmark event followed a similar poor performance of the U.S. legal tender on Jan. 8, when it dropped off 11 more kopeks from its value. On the whole, it has lost 46 kopeks, or a depreciation of about 1.6 percent, with respect to the ruble since the beginning of 2004.
The dollar’s nightmare is further worsened by the Central Bank’s decision not to interfere at the exchange transactions for the past two days, though several market experts had expected CB officials to support the dollar, whose rapidly declining exchange rate negatively influences Russian manufacturers as well as its citizens.
However, other analysts say the CB’s strategy is quite logical in the current situation, as mass ruble interventions would lead to an increase in volume of money supply, which could, subsequently, prompt inflation in Russia. According to them, the absence the CB from the auction so far does not mean it’s gradually withdrawing from the currency rates-forming process.