As the ruble weakens to record levels against the dollar and euro, Russia's Central Bank is preparing to let it float free, likely leading to a short-term inflation hike and further devaluing the currency, financial analysts said Tuesday.
In the long run, however, the removal of currency controls will lead to a healthier economy that favors sustained investment rather than speculative trading, they said. An economic slump and six months of crisis in Ukraine have caused the ruble to devalue sharply. At 7 p.m. on Tuesday the ruble was trading at 37.45 to the dollar, just short of the record of 37.5 to the dollar it reached on Monday. The Russian currency was at 42.7 rubles to the dual-currency euro-dollar basket the Central Bank uses to monitor the ruble's value, close to the 43.3 ruble historical maximum set in March. The Central Bank said it would start buying currency to support the ruble if it weakened to 44.4 rubles to the basket.
Rotterdam, 02/09/2014-INC News
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