Russian currency depreciates, with Euro exchange rate climbing above 93 rubles for the first time since July.
In a significant move, the Central Bank started using data from both the exchange and over-the-counter markets to form official exchange rates in December 2024. This change aimed to improve the accuracy and representativeness of the exchange rate, providing a more comprehensive reflection of real-time market conditions.
The decision to include over-the-counter transactions was made to capture a fuller picture of currency supply and demand dynamics. This approach is common among central banks seeking to enhance the robustness of their official exchange rates. However, the precise reasoning for this methodological change as of December 2024 is not explicitly stated in the available search results.
On July 5, the official exchange rate of the euro stood at 93.01 rubles, marking a decrease of 0.12 rubles from the previous day's rate of 93.13 rubles. The yuan also saw a change, gaining 0.11 rubles to reach 11.07 rubles on the same day. Meanwhile, the dollar rose by 0.41 rubles to 78.86 rubles.
This shift in the exchange rate was likely due to US sanctions that halted trading in key currencies on the Moscow Exchange. The exact impact of these sanctions on the exchange rates is not detailed in the provided information.
It's worth noting that the Central Bank's official Financial Stability Report from December 2024 does not specifically address the exchange rate methodology shift. Other search results provide exchange rate data or related economic indicators but do not mention the December 2024 transition to including OTC data explicitly.
This change in the Central Bank's approach to exchange rate determination is expected to provide a more accurate and market-driven exchange rate, benefiting both businesses and individuals in their financial transactions. As more data becomes available, a clearer understanding of the impact of this change on the Russian economy is likely to emerge.
The Central Bank's decision to incorporate over-the-counter transactions into their data analysis was aimed at enhancing the accuracy and representativeness of the official exchange rate, a common approach in banking-and-insurance industries seeking to strengthen their currency rate calculations. This shift in methodology, initiated in December 2024, is expected to lead to a more market-driven and accurate exchange rate, benefiting the finance industry in Russia.
