Current Events > Russia's ruble hit its strongest level in 7 years despite massive sanctions.

(+) Yeah! (+)

https://www.cnbc.com/2022/06/23/russias-ruble-is-at-strongest-level-in-7-years-despite-sanctions.html

Russias ruble hit 52.3 to the dollar on Wednesday, its strongest level since May 2015. On Thursday afternoon in Moscow, the currency was trading at 54.2 to the greenback, slightly weaker but still near seven-year highs. Thats a world away from its plunge to 139 to the dollar in early March, when the U.S. and European Union started rolling out unprecedented sanctions on Moscow in response to its invasion of Ukraine. The rubles stunning surge in the following months is being cited by the Kremlin as proof that Western sanctions arent working. The idea was clear: crush the Russian economy violently, Russian President Vladimir Putin said last week during the annual St. Petersburg International Economic Forum. They did not succeed. Obviously, that didnt happen. In late February, following the rubles initial tumble and four days after the invasion of Ukraine began on Feb 24, Russia more than doubled the countrys key interest rate to a whopping 20% from a prior 9.5%. Since then, the currencys value has improved to the point that its lowered the interest rate three times to reach 11% in late May.

The ruble has actually gotten so strong that Russias central bank is actively taking measures to try to weaken it, fearing that this will make the countrys exports less competitive. But whats really behind the currencys rise, and can it be sustained? The reasons are, to put it simply: strikingly high energy prices, capital controls and sanctions themselves. Russia is the worlds largest exporter of gas and the second-largest exporter of oil. Its primary customer? The European Union, which has been buying billions of dollars worth of Russian energy per week while simultaneously trying to punish it with sanctions. Thats put the EU in an awkward spot it has now sent exponentially more money to Russia in oil, gas and coal purchases than it has sent Ukraine in aid, which has helped fill the Kremlins war chest. And with Brent crude prices 60% higher than they were this time last year, even though many Western countries have curbed their Russian oil buying, Moscow is still making a record profit. In the Russia-Ukraine wars first 100 days, the Russian Federation raked in $98 billion in revenue from fossil fuel exports, according to the Centre for Research on Energy and Clean Air, a research organization based in Finland. More than half of those earnings came from the EU, at about $60 billion. And while many EU countries are intent on cutting their reliance on Russian energy imports, this process could take years in 2020, the bloc relied on Russia for 41% of its gas imports and 36% of its oil imports, according to Eurostat. So this is bringing in a big current account surplus. Russias current account surplus from January to May of this year was just over $110 billion, according to Russias central bank more than 3.5 times the amount of that period last year.

Damn, who here was it who said to buy during the dip?

Did anyone buy the dip?

The value of the ruble means nothing because it's being propped up completely artificially by the Russian government.

UnholyMudcrab posted...

The value of the ruble means nothing because it's being propped up completely artificially by the Russian government.

Thats a lie. What actually happened was countries were decrying the situation publicly but still never actually stopped buying oil from them all the while raising gas prices. Increased demand for a limited supply simple economics happened when no one was paying attention.

lol sanctions