On Thursday, the Russian ruble experienced further decline to its lowest level since March 2022. The value of the Russian currency fell to 93 against the US dollar on Thursday.
Over a year-long war with Ukraine and subsequent western sanctions have undermined the value of Russian ruble.
According to experts, the ruble has been characterized by significant volatility due to the West’s sanctions targeting Russia’s foreign currency reserves and crucial energy exports, in response to Russia’s invasion of Ukraine.
File photo of Russian banknotes.
Following the invasion, the ruble plummeted beyond 100 against the dollar. However, strict capital controls, surging energy prices, and a decline in Russian imports propelled the currency to become the best-performing currency globally throughout much of 2022.
This screenshot shows the latest dollar to Russian ruble exchange rate on July 6.
Unfortunately, Europe’s cessation of Russian oil and gas purchases and measures such as the G7’s oil price cap have once again exerted pressure on the ruble in the last six months.
In 2023 alone, the ruble has already lost 25% of its value. As trading gained momentum on Thursday, the currency is hovering around 93 against the U.S. dollar.
Experts believe that the fact that the Kremlin and Prigozhin reached some sort of agreement to suppress the coup attempt helped avert a severe crisis in both Russian and global markets.
Kathleen Brooks, a director at Minerva Analysis, stated that if the situation had escalated and there was a threat of civil war in Russia, it would have caused significant havoc in financial markets.
Developments in Russia and Ukraine have a substantial impact on global commodity prices, including crude oil and grains, as both countries are vital agricultural exporters.
Russian analysts anticipate increased volatility in the coming days as traders and investors remain cautious. Igor Galaktionov, an expert at Moscow-based brokerage BCS Express, mentioned that although tensions eased towards the end of the weekend, the emotional impact may persist for some time, which could pressure the stock market.
The apprehension that something unexpected could occur at any moment may discourage a certain category of investors from making purchases.
