Russian Ruble Down Sharply After PM Medvedev Calls for Lower Rates

The Russian ruble was down as much as 2% against the dollar on Thursday, after Russian Prime Minister Dmitry Medvedev called for “lower cost of loans” to stimulate economic growth at the Moscow Financial Forum.

Prime Minister Medvedev’s comments are in stark contrast to sentiments expressed by Bank of Russia Governor Elvira Nabiullina.

Earlier this week, Nabiullina said that the key interest rate - currently at 7.25% - may be raised at the next meeting, which is scheduled to take place on September 14, 2018.

And as Reuters reports, Bank of Russia’s new monetary policy chief, Alexei Zabotkin, who also spoke at the Moscow Financial Forum today, said rates are likely to be raised due to the current economic conditions in Russia.

While today’s two-percent sell-off was mild compared to the previous crashes related to U.S. sanctions, traders were able to push the ruble down to its lowest level in two and a half years (69.6289 rubles per dollar).

At press time, the USD/RUB currency pair is floating around 69.21.

Moscow downtown photo: 1