The ruble appreciated for a change yesterday, having faced a lot of headwind recently and having come under strong pressure against EUR and USD, i.e. a downmove in EUR-RUB and USD-RUB.



Of course well versed market participants will immediately think of the oil price, and indeed, the oil price did increase notably intraday yesterday and of course the ruble was able to benefit.



However, what may seem even more important is the fact that the Russian central bank announced yesterday that it will suspend the increase of its FX reserves. Recently the central bank had been buying approx. USD 160 m per day.



When taking the step the central bank referred to the rise in volatility on the domestic FX market. The central bank is clearly trying to prevent the recent ruble weakness from gathering pace and thus becomes a problem.



"It therefore seems to make complete sense to stop ruble sales, in particular as the decision is more significant than the volume seems to suggest (USD 160m), it also constitutes a signal for the market", says Commerzbank.