The ruble has strengthened against the dollar by approximately 12% since the beginning of April, recording the best performance globally based on this index, Bloomberg reported.
At the highest point in over two years
According to the publication, the exchange rate of the ruble against the dollar has reached its lowest level since February 2023, which means that the Russian currency has recovered a significant portion of the losses it suffered after the outbreak of the war in Ukraine and the wave of western sanctions. Bloomberg attributes the rise primarily to high energy prices amid the US-Israel conflict with Iran, as Russia continues to be one of the largest exporters of oil and natural gas in the world. The rise in oil prices increases Moscow's revenues in foreign currency and bolsters the demand for rubles.
Counter to economists' predictions
The ruble is strengthening for the second consecutive year, refuting the predictions of economists. Analysts who spoke to the agency estimate that this might indicate the currency is overvalued. In particular, Iskander Lutsko, a senior portfolio manager at Istar Capital, characterized the current macroeconomic conditions as "ideal for further strengthening" of the Russian ruble.
Sanctions did not 'bend' the Russian economy
Despite unprecedented Western sanctions, the Russian economy has demonstrated greater resilience than many Western analysts predicted. Moscow redirected a large part of its energy exports toward Asia, principally toward China and India, while simultaneously boosting transactions in national currencies instead of dollars. At the same time, the high interest rates of the central bank contributed to supporting the ruble, limiting capital flight and boosting the yields of Russian assets. The Central Bank of Russia maintained a strict monetary policy in order to restrain inflation and protect the currency.
The 'war economy' fuels growth
A significant role in the resilience of the Russian economy is also played by the large increase in government spending, particularly in the defense sector and the military industry. The so-called "war economy" has boosted industrial production, employment, and wages in several sectors. However, several analysts warn that the strong economic growth relies mainly on state spending and energy exports, something that could create long-term pressures, especially if oil prices decline or the fiscal cost of the war increases further.
www.bankingnews.gr
Σχόλια αναγνωστών