Currency drops its lowest level since late May

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On Wednesday, the Russian rouble extended its sharp plunge from the previous day, hitting its lowest levels against the dollar and the euro since late May before regaining support from the government as intervention rumours spread.

The rouble hit almost seven-year highs a week ago, but since then, it has lost more than 20% of its value against the dollar as a result of concerns from various officials about the currency’s strength. At 7:26 GMT, the rouble has fallen 4.5 percent to 63.90 against the dollar, its lowest value since May 30.

It has decreased to 66.6450, matching its May 30 low. Since then, it had dropped 3.5 percent to trade at 65.83 against the euro. The rouble is continuing its downward correction from multi-year highs in expectation of moves to control the currency, according to a report from Veles Capital.

The rouble started to really decline not long after Finance Minister Anton Siluanov said that Russia could employ currency intervention to slow the rouble’s growth. On Tuesday, the rouble fell by almost 10%, and the central bank steadfastly declined to say whether there had been any intervention. The finance ministry denied having any plans to use the anticipated additional budgetary money to buy gold or foreign currencies.

After hitting its lowest point since May 11, the Russian Trading System index, which is measured in dollars, dropped by 3.1 percent to 1,111.2 points. The rouble-based Russian MOEX index climbed 1.2 percent to 2,254.1 points.