From January to June this year, the ruble rose 40 percent against the dollar. The Russian ruble has become the strongest currency this year as the value of the dollar continues to rise. Russia’s currency has become the world’s most effective currency. This information has been informed in a report of the American media CBS News.
In February, the United States and other Western allies imposed unprecedented economic sanctions on Russia in response to its aggression. After three consecutive months, the ruble began to fall, but suddenly it started to turn around again. According to a CBS report, the ruble has risen 40 percent against the dollar since January this year. The New York Times reports that from June 2015 to June this year, the ruble has peaked in the last six years.
Meanwhile, Jeffrey Frankel, a professor of capital formation and growth at Harvard Kennedy School, described the sudden reversal of the banned Russian currency as “an unusual situation”. In the face of international sanctions and major military conflicts, the value of a country’s currency has never risen in the history of the world. According to experts, investors will leave the country facing such problems and the flow of capital will be hampered – this is normal; As a result, the value of the country’s currency will fall. But in the case of Russia, the opposite is happening.
In Putin’s country, various measures to retain money and capital are working “abnormally”. The decision to impose sanctions on Russia, the main energy exporter of European countries, is working against Europe itself. Fuel prices have risen as a result of the volatile political and economic situation. Russian President Vladimir Putin has issued an ultimatum to pay fuel in rubles against the dollar in response to Western sanctions. As a result, the West has not benefited much from the sanctions, but Russia’s economy is growing.
The strengthening of the ruble means that the economic sanctions imposed on Russia by the West are not working. However, US researchers say it is not yet clear how long the ruble’s protection against the dollar will last.
The ruble became the weakest currency of all time against the dollar after the invasion of Ukraine in late February. In that situation, Russia’s central bank raised interest rates more than twice, to 20 percent, to stop the outflow of the ruble from the economy. Some restrictions were then relaxed, and interest rates were lowered to 9 and a half percent before the invasion of Ukraine. Meanwhile, the ruble began to return to normal in the world currency market. Inflation in Russia has also eased a lot as the currency continues to strengthen.
But experts say there will still be pressure on Russia’s budget. Because the country’s income is largely dependent on fuel exports. And fuel sales are largely dependent on the dollar.
Tag: Russian ruble