The Russian ruble strengthened against the dollar on Monday after President Vladimir Putin said there were no "fundamental economic reasons" for the currency's slide, but analysts –and the country's central bank -- beg to differ.
Speaking at an Asia Pacific Economic Cooperation (APEC) summit on Monday morning, Putin said he was hopeful that speculation against the ruble would stop soon, Reuters reported.
The currency has slumped almost 30 percent against the greenback this year. A decline in oil prices and Russia's conflict with Ukraine that have led to Western sanctions on Russia, which have hit the economy as well as investor confidence in the country.
Early on Friday, the ruble hit its weakest-ever level against the U.S. dollar, sliding to 48.6, before recovering to trade at 46.2 within a few hours.
In an effort to quell speculative trading, the head of Russia's central bank, Elvira Nabiullina, said on Monday the bank had allowed the currency to float freely, abandoning its trading corridor, news agencies reported.
As the traders digested this news and Putin's speech at the APEC summit, the ruble traded 2.8 percent higher, at 45.35 against the dollar.
Putin also said Russia and China intend to increase the amount of trade that is settled in yuan and ruled out capital controls for Russia, despite capital flight which has exacerbated the ruble's decline.
He vowed to keep Russia's debt levels down and said Russia planned to use part of its "sovereign reserves" to improve access to loans to draw foreign investment, but did not elaborate. "There will be no increase of sovereign debt," Putin said. "We are planning to keep it at a safe, manageable level of below 15 percent of GDP."
Putin's attempts to reassure a global audience over the state of the Russian economy was a "sign of the seriousness of the situation that Putin feels the need to comment and try and re-assure on the exchange rate," the head of emerging markets research at Standard Bank, said in a note Monday.
Timothy Ash said he would contend that low growth, lower oil prices, sanctions halting dollar liquidity and Russia's ability to borrow, plus the security concerns in Ukraine "are all pretty fundamental factors".
He said it was important that Putin had spoken, as "it suggests that officials will be more determined to defend the ruble again to support the boss' view".