Russian ruble crashes to 97
The Russian ruble has crashed in a year due to an unending war with Ukraine and the US-led Western sanctions. By Aug 15, 2023, the Russian ruble experienced a further decline and hit the lowest level since March 2022. The value of the Russian currency fell to 97 against the US dollar on August 15.
Over a year-long war with Ukraine and subsequent Western sanctions have undermined the value of the currency and the Russian ruble crashed to 97 on August 15. 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 currency as Russian ruble crashes to 97.
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.
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 by falling to 97 to a dollar.
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, 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.
Russia invaded Ukraine on Feb 28, 2022, and in the first week of March, the Russian ruble crashed to 128 against the US dollar. It was the outcome of economic sanctions imposed by the United States and some European countries.
However, the strategic decisions of Russian President Vladimir Putin gave support to the ruble and it surged to 57 on June 20, 2023. In fact, the Russian President has linked gas payments with the Russian currency, which led to a rapid recovery in the value of the ruble.
As the Russia-Ukraine war has prolonged since Feb 2022, the depreciation of the Russian currency demonstrates the negative impact of the war.
