Effective from 10 November 2014, the Bank of Russia abolished the exchange
rate policy mechanism through cancelling the permissible range of the
dual-currency basket ruble values (operational band) and regular interventions
on and outside the borders of this band. However, the new approach of the Bank
of Russia to operations in the domestic market does not provide for complete
abandonment of foreign exchange interventions, which can be implemented in case
of financial stability threats. Meanwhile, the new exchange rate regime provides
for predominantly reverse transactions in the domestic market.
As a result of the implementation of this decision, the ruble exchange rate
will be determined by the market factors, that should enhance the efficiency of
the Bank of Russia monetary policy and ensure price stability. Besides, the new
approach to operations in the domestic FX market will contribute to faster
adjustment of the economy to changes of external conditions and enhance its
resistance to negative shocks.