Russia is assessing its options of how to tackle the sliding price of the rouble.
The nation's currency has fallen considerably since the turn of the year with Western sanctions and declining oil prices biting hard. It hit an all-time low on Tuesday (December 16th) when one US dollar bought 79 roubles. However, this has now improved slightly with the current rate standing at 62 roubles to the dollar.
Russia's central bank announced a huge increase in interest rates earlier in the week, introducing a hike from 6.5 per cent to 17 per cent. This decision was unable to halt the sliding rouble and it has meant that the country must now look at other options to help stabilise the currency.
Prime minister Dmitry Medvedev has already ruled out the introduction of capital controls, where money is restricted from moving out of the country, which would be regarded as a last resort for struggling nations.
Speaking at an emergency meeting of minister and industry leaders, Mr Medvedev said: "Central bank and the government have worked out a package of measures to stabilise the situation. What we are seeing today is mainly emotional games.
"It is in our interests to bring order to the markets, no one gains from instability. But at the same time, there is no need for tough regulations, as used to happen in the past. It does not bring anything good – we shall use market tools."
The central bank stated that it would introduce additional capital to Russia's banks and financial companies if there is a need to. It added that it would also hold more foreign exchange auctions if needed.
Russia relies heavily on revenues from oil exports but has been hampered significantly as prices have slumped. Production levels are not set to change after members of the Organization of Petroleum Exporting Countries (Opec) voted against an output cut.
Find up to date information on the FTSE 100 and spread betting strategies at City Index
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.