On parameters of Bank of Russia exchange rate policy

Effective from 10 November 2014, the Bank of Russia abolished the exchange rate policy mechanism through cancelling the permissible range of the dual-currency basket ruble values (operational band) and regular interventions on and outside the borders of this band. However, the new approach of the Bank of Russia to operations in the domestic market does not provide for complete abandonment of foreign exchange interventions, which can be implemented in case of financial stability threats. Meanwhile, the new exchange rate regime provides for predominantly reverse transactions in the domestic market.

As a result of the implementation of this decision, the ruble exchange rate will be determined by the market factors, that should enhance the efficiency of the Bank of Russia monetary policy and ensure price stability. Besides, the new approach to operations in the domestic FX market will contribute to faster adjustment of the economy to changes of external conditions and enhance its resistance to negative shocks.

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