The Russian ruble fell to the lowest level in 16 months against the dollar

The Russian ruble fell by more than two percent against the dollar on Tuesday, to its lowest level in more than 16 months, above 97, due to strong domestic demand for foreign currency.

The ruble recovered on Monday to post intraday gains for the first time in August, but gave up those gains on Tuesday morning. The ruble fell more than 4 percent against the dollar and the euro last week, marking one of the worst-performing weeks of the year.

And by 1859 GMT, the ruble fell 1.92 percent against the dollar to 97.1, the lowest level since March 25, 2022.

The ruble tends to weaken at the beginning of each month after losing support during the end-of-month tax period when exporting companies usually shift their foreign currency earnings to meet domestic obligations.

Market participants attribute concerns about the ruble to the exit of Western companies from Russia, which may require large purchases of foreign currencies and enhance the volatility of the currency market.

The Central Bank said today that the imbalance in the trade balance with the decline in exports and the rise in imports is the main reason for the weakness of the ruble.