The ruble has cemented its unlikely position as the world’s highest performing currency, hitting a record high this week for the first time in years. The ruble has returned since it collapsed in a few weeks after Russia invaded Ukraine and imposed international sanctions aimed at destroying the Russian economy.
On Tuesday, it traded at the strongest level against the US dollar since June 2015. This year it has risen about 35% so far, surpassing all major currencies and more than doubling its post-invasion lows.
Russia’s economy remains better than many expected, but the outlook is bleak, with double-digit inflation, and most economists predict a serious recession. However, capital restrictions imposed by central banks have increased demand for Russian currencies, including those that forced exporters to exchange some of their earnings for rubles.
Higher returns from oil and gas exports surged as rising prices and Asian demand compensated for European cuts continued to raise the ruble. At the same time, Russian imports have plummeted. This is partly due to the withdrawal of many foreign companies that support the ruble from Russia.
In late February after the invasion, the ruble plunged to the weakest level in history against the dollar, and the Central Bank of Russia more than doubled interest rates as part of a move to stop the ruble from flowing out of the economy. Raised to%. Since then, some restrictions have been relaxed and the rate set before the intrusion has been reduced to 9.5%. However, the ruble continues to strengthen, not only helping to mitigate inflation, but also putting pressure on Russia’s budget, which often relies on dollar-denominated energy sales.
