Ruble, the Russian currency has become stronger than it was on the day of the invasion of Ukraine as the government’s pushback to harsh sanctions by the West has borne fruits.
The ruble had earlier plummeted to a record low of 138 rubles per dollar as a result of Western sanctions, bringing back memories of the currency’s battering during the 1998 Russian financial crisis. Nonetheless, Russia’s financial resilience has been demonstrated, as the country’s currency has outperformed its value before the invasion of Ukraine.
On Feb. 24, the first day of the invasion, the ruble traded at 81 rubles per dollar. At the time of writing this article, the ruble is currently trading at 78 rubles per dollar.
What’s become clear is that, despite an incredibly broad package of sanctions against Russia’s government and oligarchs, as well as an exodus of foreign businesses, the actions are largely ineffective if foreign nationals continue to consume Russian oil and natural gas, bolstering the ruble.
At the time of writing, the ruble had gained 75% against the US dollar in the past month, and was 6% away from reaching YTD levels. Despite the current rally, the ruble’s long-term prospects appear to be bleak.
Due to the obvious sanctions, ruble trading volumes have dried up, and currency speculators are wary of dealing in the currency. As a result, the present market price of the ruble is decided by considerably fewer transactions than typical, raising a cause for alarm, particularly in the long term.
Nairametrics
