Russia to step up support for sagging rouble

Russia's central bank announced Wednesday it plans to sharply step up support for the rouble, which has weakened considerably after 18 months of Western sanctions following Moscow's military intervention in Ukraine.

The Bank of Russia said that between September 14 and 22 it would sell each day 21.4 billion roubles ($218.5 million) of foreign currency on the market, about 10 times the current volume it is selling on a daily basis.

The central bank tied the move to an upcoming payment of foreign currency bonds issued by the government, known as eurobonds.

"Holders of eurobonds will be paid by the Finance Ministry in roubles in accordance with the established procedure, and therefore a portion of these bondholders may create additional demand for foreign currency," the Bank of Russia said.

The Russian government instituted the payment of these bonds in roubles instead of the foreign currency they are formally denominated in following the imposition of Western sanctions.

The additional volume by the central bank  "will help respond to possible additional demand for foreign currency and reduce volatility on the market during this period." While the value of the rouble recovered after a fall after the start of Russia's military campaign in Ukraine thanks to measures taken by the authorities, it has been sliding for the past year.

It fell precipitously at the start of August, breaking the 100 rouble to the dollar level for the first time since in the immediate wake of the start of the military campaign.