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The ruble is fast descending toward the danger zone that may trigger the first foreign-currency sales by the Russian central bank in more than a year, Bloomberg reported referring to the results of its survey.
The Russian currency would need to weaken about 13% to 90 against the dollar for the central bank to step in, according to the median of 15 analysts polled by Bloomberg.
Currency sales in support of the ruble were the likeliest course of response for the Bank of Russia, followed by verbal interventions and an emergency interest-rate increase, the economists said.
"The central bank may not be able to tolerate for much longer the rapid pace of the ruble’s depreciation, which after all will have negative implications by slowing down the disinflationary process," said Piotr Matys, a strategist for emerging-market currencies at Rabobank in London, according to Bloomberg.
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At this, Andreas Schwabe, an economist at Raiffeisen Bank International AG in Vienna said that "only in a situation of drastic deterioration and market panic would we expect strong and decisive action by the central bank."
Russia relies on oil and natural gas for almost half its budget revenue and collapsing crude prices have weakened the ruble. The central bank, which responded to the currency crisis a year ago with an emergency 6.5 percentage-point rate increase in the middle of the night, hasn’t sold foreign exchange since allowing the ruble to float freely in December 2014.
Read also"We have lost": Sberbank of Russia's CEO calls Russia "downshifter state""The Bank of Russia is walking on a knife’s edge, needing to stem inflation, while at the same time allowing the ruble to depreciate gradually with oil to support federal government budget revenue," Per Hammarlund, the chief emerging-markets strategist at SEB AB in Stockholm, said by e-mail.
"Unless households start selling rubles in panic as in December 2014, the central bank is unlikely to intervene heavily."