London, Thursday, 25 August 2022
The Russian ruble was trading around 60 to the dollar in August, maintaining values that were substantially above those before Russia invaded Ukraine and solidifying its recovery from the record low of 150 that it reached in March. This recovery was aided by tight capital controls and trade imbalances.
Since the beginning of the war, higher energy and commodity prices have increased export revenues and relative ruble demand despite a decline in importing owing to sanctions. Additionally, financial regulators imposed high fees and negative interest rates on the currencies of "unfriendly" nations.
The discrepancy is evident in the largest current account surplus ever recorded, which increased from USD 17.3 billion in the second quarter of last year to USD 70.1 billion in the second quarter.
The currency's strength resisted the CBR lowering borrowing prices to levels lower than those before the invasion, amid ongoing weekly deflation readings and requests for a ruble devaluation from officials in the State Duma and the central bank.
(Source: Trading Economics // Edit by: The Decision Maker – Finance editors)