Despite sanctions and partial Swift exclusion: the Russian ruble is recovering noticeably! In fact, it is even rising back to pre-war levels.
By Robert Becker
► Conversely, the dollar fell to 79 rubles on Thursday morning. The exchange rate is roughly at the level it last had at 78 rubles immediately before the outbreak of the Ukraine war.
However, the event is not a sign that the Russian economy is coping with the sanctions imposed by the United States and its allies over Putin’s war of aggression, said US Treasury Secretary Janet Yellen. Measures by the Russian government and central bank to limit capital outflows would distort the ruble market.
Analysts also refer to the high key interest rate of the Russian central bank, strict capital controls and surpluses in the trade balance due to the still possible energy exports.
After the start of the Ukraine war on February 24, the exchange rate of the ruble collapsed, at times up to 177 rubles were paid for one dollar. In the past few weeks, however, the price has recovered quickly.
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With the sanctions imposed by western industrialized countries on the Russian central bank, the ruble is no longer considered a freely tradable currency. On the foreign exchange market, however, the currency is traded with restrictions, which allows for a ruble exchange rate.
► Currency expert Tatha Ghose from Commerzbank sees one reason for the recovery of the ruble in the high interest rates in Russia. The country’s central bank doubled the key interest rate to 20 percent at the end of February.
► In addition, the Commerzbank expert referred to strict capital controls. The central bank has limited foreign exchange exports.
► Also, sanctioned oligarchs and corporations cannot transfer money from Russia to foreign bank accounts.
► Analysts also refer to the Russian trade balance. “The trade balance should improve after the sanctions,” said Commerzbank expert Ghose. Because while the export of Russian energy such as oil or gas is still possible, the import of Western goods has been severely restricted by the sanctions.
