Rouble regains some ground after sanctions trigger sharp slump
Rewrites throughout, adds quotes
By Gleb Bryanski
MOSCOW, Nov 29 (Reuters) -The Russian rouble gained around 2% against the dollar on Friday after the central bank and government joined President Vladimir Putin in verbal interventions aimed at calming forex market turmoil triggered by the latest round of U.S. sanctions.
By 1615 GMT the rouble RUB- was up 1.9% to 106.00 to the dollar, having briefly recovered to 104.50 at one point during the session. The Russian currency is at its weakest levels since March 2022, the first full month of the Ukraine war.
The U.S. last week imposed sanctions on Gazprombank, a major lender that handles payments for Russia's energy exports to Europe and is a top supplier of foreign currency to the domestic market.
Since then the rouble has lost about 15% against the dollar in what many analysts described as panic buying of foreign currency, exacerbated by a new round of tensions between Russia and the West.
"We assume that once the market nervousness subsides, the exchange rate will return to its fundamental values," Economy Minister Maxim Reshetnikov said, noting that banks and FX inflows needed to adapt to the new sanctions.
The rouble plunged to a low of 114.50 per dollar on Wednesday, leading the central bank to respond with FX market interventions.
The central bank and Putin have also used verbal interventions to try and limit the damage.
Rouble weakness, though beneficial for some exporting companies and the state budget, has added to widespread challenges including high interest rates, persistent inflation, labour shortages and an overheating economy.
Many analysts now expect the central bank to hike interest rates to 23% from 21% at its Dec. 20 rate-setting meeting to counter inflation, fuelled by the rouble's weakness.
The government cut its 2025 wheat export quota on Friday and called for new measures to keep domestic price growth under control.
In central Moscow, people said high prices were affecting business.
Riki, a shop owner from India, said they buy in U.S. dollars and are really suffering because costs are 25% to 30% higher.
"We just don't know if it is going to stop now or raise higher and higher," Riki told Reuters, who declined to give his surname. "We are really worried."
Beauty industry worker Tatiana Ogushenko said she was seeing fewer customers.
"People understand they would better spend money on some basic goods that we need every day rather than on hair extensions," she said.
Reporting by Gleb Bryanski; Editing by Alexander Marrow, Kirsten Donovan and Jonathan Oatis
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