The ruble began to rise again in the middle of the week after the opening of the Moscow Stock Exchange after a two-day hiatus, raising its exchange rate against the dollar by 11 percent since the beginning of the year. It also overtook the Brazilian real and became the top-performing major currency out of the 31 that Bloomberg regularly tracks, its exchange rate news agency. The naval ruble rose a little more.
Russia’s foreign exchange gains this year are largely due to the Russian government implementing a lot of austerity measures to protect the exchange rate after Western countries imposed heavy sanctions on the Russian economy in response to the country’s military aggression against Ukraine. The first reaction to this was the astonishingly deep soar of the Russian currency. The main restrictive measure was that Moscow forced exporters to sell their stock of foreign currency and accept payment only in rubles for delivery, including for natural gas he is.
At the same time, according to some interviewed experts, the strengthening of the ruble does not completely cover the reality, many forex companies have stopped trading in the Russian currency, which is why forex trading cannot be done in reality. However, the role of the ruble is unique, as countries that have imposed similar capital controls in the past have failed to take similar measures to prevent their currencies from weakening. Argentina and Turkey are good examples of this in recent years, with the peso and the lira dropping to new lows and not recovering. At the same time, the last two countries were not subject to any kind of sanctions that would virtually eliminate imports into the country, and the balance of foreign trade between them was not significantly positive in one fell swoop.
The change in Brazilian monetary policy also played a role in the ruble’s ability to take the lead. After raising the key interest rate by 1,075 percent in early 2021, the country’s monetary policy makers have indicated that they will slow the pace of increases and even end the tightening cycle soon. The interest rate differential between the dollar and the riyal is still very high, but may continue to narrow with the US Federal Reserve raise interest rates Implement.
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