The value of the ruble against the U.S. dollar hit a 17-month low.
The rouble hit 100.84 against the dollar on the morning of the 14th (local time), exceeding the 100 roubles per dollar since March 23, 2022, according to Reuters.
Russia is riding a rollercoaster economically after the invasion of Ukraine. The rouble fell from 76 rubles to the dollar a week before the invasion to 135 rubles the following month.
However, after the central bank’s defense measures overcame the crisis, soaring oil prices boosted Russian export imports. As a result, it recorded a record trade surplus of $221 billion in 2022, up 86% from the previous year. The ruble made a U-turn and soared to a seven-year high.
However, the trade surplus shrank sharply this year as imports increased due to increased consumer purchases and the government’s investment in military industrial complexes. Oil sales have been hit by the embargo and price caps, while crude oil prices have fallen since last year’s high. In the coup of Yevgeny Prigozhin in June, many Russians transferred money to foreign accounts.
“The main cause of the weak rouble and accelerating inflation is loose monetary policy,” Maxim Oreshkin, Russia’s presidential economic adviser, commented on TASS news agency. “The central bank has all the tools necessary to normalize the situation in the near future and lower lending rates to sustainable levels.”
Meanwhile, Russian monetary policy officials are closely watching the possibility of higher inflation. To prepare for this, the Russian central bank made an unexpected increase late last month, raising interest rates to 8.5%.