Russian ruble approaches 100 per USD

Russian ruble approaches 100 per USD

Ukrinform
The fall of the Russian ruble continues amid a significant outflow of foreign currency, deteriorating foreign trade conditions and sanctions in connection with Russia's war against Ukraine.

According to Ukrinform, Bloomberg reported this.

The fall of the Russian ruble is almost unabated amid a significant outflow of currency from Russia and deteriorating foreign trade conditions, as sanctions over the war in Ukraine have a negative impact on the Russian economy.

The ruble has weakened by 23% against the dollar this year, moving it into the top three worst performing currencies along with the Turkish lira and Argentine peso.

"The ruble traded below 97 to the dollar today and is approaching 100 to the dollar, a level last seen during the first month after Russian leader Vladimir Putin ordered an invasion of Ukraine in February 2022," the report said.

The current account surplus - roughly the difference between exports and imports - is expected to be close to zero in July after turning negative in June, according to Bloomberg Economics.

Read also: Moscow doubles its war spending - Reuters

Russia's Central Bank Governor Elvira Nabiullina has repeatedly pointed to the deterioration in foreign trade conditions as the main reason for the ruble's collapse, except for interventions to support the exchange rate.

The Russian currency has almost halved in value since last year's peak of capital controls amid increased government spending, falling energy revenues, and Russians' desire to place funds in foreign accounts.

The latest data from the Central Bank of Russia showed that in June, major Russian exporters sold 84% of their foreign exchange earnings over the market. But their profits - a key source of hard currency for Moscow since the invasion - fell to $6.9 billion in July from $16.8 billion in the same period last year.

The ruble has lost the last source of support it had from regular sales of foreign currency by the Russian Ministry of Finance, as the financial authorities have switched to purchases under the budget rule since August.

Read also: Finnish Gasum terminates gas contract with Russian Gazprom

The psychologically important mark of 100 rubles to the dollar may be reached soon, Georgy Vashchenko, deputy head of research at Freedom Finance Global, based in Astana, said.

"I would not expect the weakening trend to stop," Vashchenko said.

As reported, the dollar and euro rose sharply against the ruble after Russia launched its full-scale war against Ukraine. After that, the Russian authorities took measures to artificially maintain a relatively low exchange rate.

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