MOSCOW: The Russian rouble weakened sharply against the US dollar on Friday after the central bank announced it would withdraw some support for the currency in the first working week of 2025 after the New Year break.

The rouble was down 3.4% at 100.50 against the dollar by 1130 GMT, over-the-counter market data showed. The Russian currency weakened 0.28% to 13.37 against China’s yuan in trading on the Moscow Stock Exchange (MOEX).

“The rouble/dollar exchange rate could have been influenced by the closing of some specific positions in currency instruments. Most likely, the current dynamics of the dollar are temporary,” T-Bank’s analyst Sofya Donets said.

Analysts said the over-the-counter market, where dollars and euros are traded in Russia, remained volatile, adding that the exchange-traded yuan was not showing the same dynamics.

The central bank said it would reduce its net forex sales by almost 60% from Jan. 9 under its complex scheme of foreign currency operations, both to ensure supply on the domestic market and to act on behalf of the finance ministry.

After the rouble tumbled to its lowest level in around 2-1/2 years in November as a result of new US financial sanctions, the central bank moved in to prop up the rouble by deferring purchases of foreign currency on behalf of the finance ministry.

The rouble regained much of its lost ground since then and stabilised at around 100 to the dollar, the level seen by the market as the new equilibrium for the Russian currency.

In a separate announcement on Friday the central bank said it was adjusting the mechanism of the official exchange rate formation, which will now combine data from the stock exchange and over-the-counter trade as well as using cross-rates.

Trade in dollars and euros moved to the over-the-counter market in June 2024 after sanctions were imposed on the Moscow Stock Exchange. China’s yuan is still trading on MOEX, becoming the most traded foreign currency in Russia.