Russian Rouble Expected to Level Off at 100/USD, VTB Head States

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The Russian rouble is expected to stabilize around 100 to the U.S. dollar following recent volatility caused by U.S. sanctions on Russia’s financial sector, according to Andrei Kostin, CEO of VTB Bank, Russia's second-largest lender.

The currency weakened by 15% after sanctions targeted Gazprombank, a key facilitator of Russia’s energy trade and a major source of foreign currency inflows. Kostin noted that the dollar had previously spiked to 120 roubles in 2022 but has since corrected to just above 100, where he predicts it will remain.

Kostin highlighted a significant shift in VTB's operations due to sanctions, which have drastically reduced the bank's exposure to U.S. dollar assets. Previously, half of the bank's balance sheet was in dollars, making it highly sensitive to exchange rate fluctuations. Now, he remarked, such movements have minimal impact.

Addressing the broader economic implications, Kostin acknowledged the exchange rate jump's mixed reception: exporters benefit, while importers face challenges. He attributed much of the market reaction to emotional factors rather than long-term fundamentals.

 

 

 

 

Paraphrasing text from "Reuters" all rights reserved by the original author.