The ruble has recouped most of its losses and become the top-performing currency globally. It continues to gain and is up 60 per cent against the US dollar from its lows in the first week of March.
The ruble appreciated to 83 to the dollar intraday on Tuesday against a record low of 139 on March 7. Thanks to the recent rally, the ruble is only about 10 per cent lower than what it was before the Russian invasion of Ukraine on February 24. The ruble was trading at around 76 before the invasion, according to the data from Bloomberg.
The biggest jump in the ruble occurred when the Russian president announced that unfriendly countries — the European Union, the US, Canada, Australia, New Zealand, Japan, South Korea, and Taiwan — would have to pay in rubles for Russian gas.
If European countries are forced to agree to it, they will have to exchange euros and dollars for rubles. This will create a big global demand for rubles, leading to a further rise in its value against the dollar and the euro.
The Russian currency has risen dramatically over the past three weeks, reflecting the efficiency of the monetary policy adopted by the central bank in response to sanctions. Another major boost was last week’s government decision to demand that “unfriendly” states pay for natural gas only in rubles rather than in dollars or euros from now on.
Earlier this month, the US and its allies imposed four rounds of unprecedented sanctions against Moscow, including the freezing of the country’s central bank reserves held abroad. The resultant inability by the Bank of Russia to support the domestic currency sent the ruble plummeting to record lows.
Since Wednesday’s announcement by President Vladimir Putin of Russia’s new energy export policies, the ruble has gained over 10%, from 100 to 90 per US dollar. Overall, the Russian currency has gained over 50% since plunging to a record low of 151 on March 7.
The ruble has been effectively boosted by the measures taken by the country’s monetary regulator. Over the past month, the Bank of Russia has raised interest rates, capped the amount of dollars that residents may withdraw from foreign-currency bank accounts, and barred banks from selling foreign currencies to customers for the next six months. Additionally, Russian brokerages were instructed not to allow foreign investors sell securities, to prevent capital outflow…..’
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