The Russian Central Bank said Thursday it will halt foreign currency purchases, a move that helped the ruble to recover from its lowest level against the dollar since 2016.
The ruble, which had endured another day of turbulence amid the threat of further U.S. sanctions, made gains after the Central Bank statement.
The ruble dropped by more than 1 percent on the Moscow exchange to briefly top 69 against the dollar, the lowest since April 2016, but recouped those losses to trade slightly up on the day at 67.8 as of late afternoon.
The Central Bank said it wouldn't buy foreign currency until the end of September "to reduce the volatility on financial markets." An earlier foreign-currency buy announced this week by the Central Bank had increased downward pressure on the ruble.
The latest tremors came amid talk that the U.S. was readying further sanctions. On Tuesday, the U.S. slapped sanctions on two Russian shipping companies over alleged oil trading with North Korea.
It could also impose much broader sanctions as a consequence of the poisoning of ex-spy Sergei Skripal in Britain in March.
The ruble's weakness has come despite a sharp pick in oil prices to $75 a barrel and an improvement in the state of the Russian economy.
"The ruble should not be this weak based on, shall we say, fundamentals," said Chris Weafer, a Moscow-based senior partner at the Macro Advisory consultancy.
"The ruble should actually be a lot stronger than we are seeing it and the reason it's not is directly linked to the sanctions coming out of the U.S."
Russian President Vladimir Putin called sanctions against Russia "counterproductive and senseless" following talks Wednesday with his Finnish counterpart Sauli Niinisto.
The last time the ruble reached similar lows was in early 2016 when oil prices fell sharply. Russia is heavily-dependent on revenues from its oil exports, but a weaker ruble can help government revenues since oil is sold in dollars.