Ruble steadies after steep declines

Russia's ruble strengthened sharply in forex trading on Wednesday (December 17th) after the government introduced measures to calm the currency crisis.

After plunging in value in the past few days, the ruble rose by nine per cent in volatile trading to 61.50 rubles per dollar, according to Reuters. It was also up by ten per cent against the Euro, standing at 76.55.

The strengthening came after the government pressured exporters not to hoard foreign-currency earnings, while the central bank acted to ease concerns over approaching external debt repayments by Russian firms.

At one point on Tuesday the ruble fell by 20 per cent against the dollar, raising fears of a financial meltdown. This occurred in spite of emergency action by the central bank to raise its key interest rate by 650 basis points. 

The slump was so severe it prompted technology giant Apple to announce that it could not sell products online in Russia because the ruble's value was too volatile for it to set prices.

"Sooner or later they'll flood the market with foreign currency, that's what the market expects. We're awaiting foreign currency from exporters, the finance ministry and central bank," said Igor Akinshin, a forex trader at Alfa Bank in Moscow.

Prime minister Dmitry Medvedev called on Russia's top exporters on Wednesday to behave "responsibly" with their forex revenues, following a meeting with the heads of state exporters, including Gazprom and Rosneft.

According to analysts, the decline in the ruble's value led exporters to retain as much of their forex earnings as possible.

In addition to a fall in the oil price, western sanctions have contributed to the ruble's depreciation. The slide has evoked memories of the 1998 Russian financial crisis, when the currency collapsed within days.

Dollar-denominated Russian shares benefited from the stronger ruble, with the RTS index up over 17 per cent to 738 points after steep losses in the past two sessions. However, the ruble-denominated MICEX fell one per cent to 1,427 points.