Russia’s Ruble takes major dive against US dollar

On Wednesday, the ruble was trading at its lowest since March 2022. The Russian currency has fallen to 119 to the euro.

The ruble’s slump has been exacerbated by the latest Western sanctions, analysts told business daily RBK.

Last week, the US imposed a new round of penalties against a number of companies in the Russian financial sector. The measures targeted Gazprombank, Russia’s third-largest bank, which has played a key role in processing payments for export operations.

“A lot depends on how soon Russia will form alternative channels for inflow and outflow of foreign currency, capable of matching its demand and supply,” Aleksandr Shepelev, a stock market expert at BCS World of Investments, told news website Gazeta.Ru.

This would allow a gradual easing of pressure on the Russian currency, the analyst noted. “And while there is a serious imbalance in the market and the financial authorities are in no hurry to intervene in the situation, the pressure on the ruble will remain,” he noted.

In addition, the ruble is under pressure from the seasonal increase in demand for imports, the surge in budget expenditure typical at the end of the year, mounting geopolitical pressure, and the rise of the US dollar on the global market, Shepelev added.

Analysts have suggested that Russia’s central bank and financial authorities could intervene to support the currency.

Commenting on the weakening of the ruble, Russian Finance Minister Anton Siluanov said on Tuesday that it is beneficial for exporting companies in the current geopolitical situation.

“I’m not saying whether the exchange rate is good or bad,” Siluanov stated, noting that a weak exchange rate provides a boost to exports and helps the government increase ruble-denominated budget revenue.