Russian Central Bank addresses ruble collapse, blames sanctions on Gazprombank

New restrictions required "adjustments in the servicing of foreign trade flows," the Central Bank noted in its November financial stability review. "These sanctions, in terms of payments for exports and imports, primarily affect the timing of the receipt of export earnings," explained Deputy Chairman of the Central Bank, Filip Gabunia.

"Summer sanctions hit imports more, these hit exports (SDN for Gazprombank). That's why we saw the ruble strengthening in the summer, and now its collapse," analysts at MMI noted. "In fact, we have entered another period of market dysfunction, when [blanket] restrictions on banks led to temporary transactional problems in the currency market,” economist Yegor Susin said.

"As previous sanctions episodes show, restrictions create infrastructural problems for foreign economic activity, but in the medium and long term, the exchange rate dynamics are determined by fundamental factors," the Central Bank wrote. Deputy Chairman of the Central Bank Aleksei Zabotkin previously estimated them to last two months. Payments will eventually be established, but they will become more expensive, analysts at MMI argue.

If the system does not adjust, the Central Bank is ready to intervene, Gabunia warned: "If short-term volatility caused by payment problems creates threats to financial stability, we have a sufficient arsenal of measures to smooth out this situation. And we will apply them if necessary."

As of Nov. 27, 2024, the Russian ruble continued its sharp decline against foreign currencies. New lows were reached for the Russian currency over the past 32 months.

Since the beginning of the year, the ruble has lost 21% against the dollar and 15% against the euro. Over the past month, it has lost 11% against the dollar and 8% against the euro, respectively.