Today’s News
In Russia, a noticeable silence has emerged regarding any connection between the recent decline of the rouble and the Ukrainian attack on the Kursk region.
Despite a 9% drop in the rouble against the U.S. dollar since August 6—the day of the attack, which is the largest on Russian territory by a foreign power since World War Two—Russian media and analysts in state-controlled banks have largely avoided linking the two events.
Image Source: Reuters
Currency traders, speaking anonymously due to the sensitive nature of the situation, indicated that foreign banks were the primary sellers of the Russian currency. The rouble reached a 10-month low against the dollar and its weakest level against the yuan since June 24 during trading on August 13. State banks, however, have mostly attributed the rouble’s fall to economic factors rather than the attack.
Sberbank, Russia’s largest bank, pointed to U.S. sanctions against Moscow’s Stock Exchange and reduced currency sales by exporters as key reasons for the currency’s decline. They noted that exporters might have scaled back currency sales recently due to more lenient requirements and the end of tax and dividend periods.
The Russian central bank has not commented on the rouble’s depreciation, and the government has remained silent as well. While leading Russian business media reported on the rouble’s decline, they avoided linking it to the Kursk attack. This cautious approach reflects an effort within Russia to prevent negative economic news from reaching the broader public.
The refrain from connecting the rouble’s decline to the Kursk attack underscores Russia’s determination to present its USD 2.0 trillion economy as resilient and self-sufficient, even under the intense pressure of Western sanctions.
Finance Minister Anton Siluanov emphasized the strength of Russia’s finances, stating, “It is important for us to build this financial shield so that all the financial pressures that anyone wants to exert on us are deflected… This is exactly what is happening now.”
One trader suggested that recent heavy rouble sales might also be linked to the upcoming halt of overseas money transfers by Austria’s Raiffeisen Bank. As the rouble began to rebound on Wednesday, some analysts downplayed any connection between the attack and the currency’s fall, while others predicted that it would soon stabilize. Economist
Mikhail Belyaev dismissed the idea that the rouble’s decline was related to the Kursk incident, calling such a linkage “an approach that… has no relation to reality.”
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