Russia's Central Bank urged to put ruble exchange rate under 'manual control'
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Vladimir Putin and the head of the Central Bank of the Russia Elvira Nabiullina (Photo: DR)
Russia's Sberbank has proposed changing the central bank's foreign exchange market rules to give it more flexibility in managing the ruble's exchange rate, The Moscow Times reported on Aug. 21.
The Central Bank currently buys or sells foreign currency on behalf of the government. If oil prices exceed the level set in the budget, $59 per barrel in 2026, additional oil and gas revenue is used to buy foreign currency. If prices fall below that level, foreign currency is sold from reserves, supporting the ruble and replenishing state coffers. The Central Bank also mirrors Finance Ministry transactions involving spending from the National Wealth Fund.
Isakov believes foreign exchange operations should be “decoupled” from the fiscal rule and replaced with a “more flexible” approach under which the Bank of Russia would independently decide whether to buy or sell foreign currency “based on the goals and objectives of maintaining price and economic stability.”
He cited the United States as an example, saying it recently intervened in the Japanese yen-dollar market simply because the exchange rate was “not where they believed the equilibrium was.” Isakov called this “a mature approach to exchange rate management.” He said the Central Bank should manage the ruble’s value “as systematically and thoroughly as it approaches interest rate decisions.”
The ruble exchange rate has long been a problem for Russia’s budget and major companies. In the first days of the war, the currency plunged to 120 rubles to the dollar before strengthening sharply to 50 to the dollar in June 2022. It then weakened again to 110 to the dollar in November 2024 before strengthening sharply once more, to 70 to the dollar in May 2026.
Earlier, it was reported that Russia’s oil and gas revenue fell in 2025 to its lowest level since the coronavirus pandemic.
Russia’s federal budget could face a significant deficit as early as the beginning of 2026 because of a shortfall in oil and gas revenue, the Russian government acknowledged.
Ukrainian intelligence said the financial condition of medium-sized and large Russian companies continued to deteriorate, reflecting growing imbalances in the corporate sector.
More than half of Russia’s large companies ended 2025 with lower profits, scaled back or completely froze investment projects, and many were preparing to lay off employees.
On Feb. 24, 2026, it was reported that about 300 companies in Russia were preparing to shut down.
For the first time, 74 Russian oblasts simultaneously faced serious financial difficulties.
Russia has also seen a wave of widespread business closures.
Russia’s Finance Ministry acknowledged that the country’s budget shortfall was widening at a record pace.
Russia’s Federal State Statistics Service, Rosstat, reported that more than 17,000 Russian companies had posted losses.
On April 3, 2026, it was reported that 22 sectors of the Russian economy had fallen deep into negative territory.
Half of Russia’s small businesses were left without profits.
In April 2026, Russia officially recorded its first GDP contraction in several years.
In May 2026, the Kremlin officially acknowledged that GDP growth had fallen nearly threefold.
Also in May 2026, Vladimir Putin moved to bring the Central Bank under full control.
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