Not impressed by Russian default earlier this week, the national currency, the ruble, climbed to a new high against the major currencies, the dollar and the euro, last night. “For the first time since May 28, 2015, the dollar cost less than 52 rubles. For the first time since May 26, 2015, the euro cost less than 55 rubles, ”the Interfax news agency reported on Tuesday after the Moscow stock exchange was closed.
The agency’s currency experts cite the impending tax payments in Russia and the high price of oil as the cause of the ruble’s strength. After the ruble exchange rate dropped sharply after the start of the war of aggression on the orders of Kremlin chief Vladimir Putin, it has been on the reconstruction course for months and has already reached twice its minimum.
Uncontrolled ruble growth
Even Russia’s technical insolvency, as determined by the Moody’s rating agency on Tuesday, had no effect on the rise of the ruble. Admittedly, this is not a typical state bankruptcy, but rather a technical problem with the transfer of debt payments that the West is blocking.
The background of the ruble’s strength is also the drastic restrictions on foreign exchange transactions by the Russian central bank and Western sanctions, which mainly concern Russian imports. As Russia’s revenues from oil and gas exports continue to rise, imports from Russia have shrunk to less than half – partly due to the Western embargo on high technology, machinery, weapons and luxury goods. As a result, the need to exchange currencies has also decreased significantly. (SDA)
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