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Silence reigns in Russia over linking rouble fall to Ukrainian attack
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Silence reigns in Russia over linking rouble fall to Ukrainian attack
Aug 15, 2024 8:53 AM

MOSCOW, Aug 15 (Reuters) - In Russia, there appears to

be a new rule: Don't mention the war in relation to the rouble.

Russian media and analysts in state-controlled banks have

stayed largely silent on a possible link between the 9% fall of

the rouble against the U.S. dollar and Ukraine's surprise attack

on the Kursk region.

The rouble's slide started on Aug. 6, the first day

of the attack - the biggest by a foreign power on Russian

sovereign territory since World War Two.

Currency traders who spoke to Reuters on condition of

anonymity due to the sensitivity of the situation said that

foreign banks were the main sellers of the Russian currency.

The rouble touched a 10-month low against the dollar and the

lowest level against the yuan since June 24 in the Aug. 13

session. State banks mostly attributed the fall to economic

factors.

Analysts at state-owned Sberbank, by far Russia's biggest

bank, blamed U.S. sanctions against Moscow's Stock Exchange,

imposed on June 12, and reduced currency sales by exporters.

"Exporters may have reduced the volumes of currency sales in

recent days. This is due to the fact that the requirements for

mandatory currency sales have become more lenient, and the tax

and dividend periods have ended," Sberbank said in a note.

FINANCIAL SHIELD

The Russian central bank has remained silent on the rouble's

fall. The Russian government did not respond to a request for

comment.

Leading Russian business media reported on the rouble's fall

- but did not link it to the Kursk attack.

Analysts quoted by the RBC business news portal attributed

the fall to shrinking exports and reduced requirements for forex

sales by exporters.

The news was also absent from main Russian state television

news and talk shows, as well as from the websites of state media

outlets.

The refrain from linking the rouble's fall to the events

unfolding just 530 km (330 miles) southwest of Moscow

illustrates a push within Russia to prevent bad economic news

from reaching the wider public.

Russia has sought to present the $2.0 trillion economy as an

increasingly invincible stronghold of self-sufficiency standing

up to the massive pressure of the West's sanctions, the most

punitive ever imposed on a major economy.

"Our finances are strong," Finance Minister Anton Siluanov

said in a speech on Wednesday.

"It is important for us to build this financial shield so

that all the financial pressures that anyone wants to exert on

us are deflected... This is exactly what is happening now,"

Siluanov said.

One trader, who spoke on condition of anonymity, suggested

that the intense rouble sales in recent days could also be

linked to an upcoming stoppage of overseas money transfers by

Austria's Raiffeisen Bank.

As the rouble started to rebound on Wednesday, some analysts

tried to dismiss any linkage between the attack and the rouble's

fall, while others predicted that it would soon stabilize.

Linking the currency decline to the Kursk incursion, said

economist Mikhail Belyaev, represented an approach that "in my

opinion... has no relation to reality".

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