Ruble collapsed in Russia, breaking the lowest mark during the full-scale war

The ruble exchange rate is falling in Russia as the dollar has reached the highest mark of 99 rubles for 16 months. This is happening against the backdrop of rising oil prices, which is an abnormal situation.

An analyst at the Washington-based International Finance Institute Robin Brooks wrote on Twitter that rising oil prices as a result of sanctions no longer mean an immediate increase in the Kremlin's revenues. Brooks cites a graph showing that the Russian ruble is falling while global Brent oil prices are rising.

The analyst saw the effectiveness of the oil price cap that the international community imposed on Russia to reduce Putin's ability to finance the war. "This detente is very unusual and is the best evidence that the oil price cap from the G7 is working. Putin doesn't get much revenue from rising oil prices as he did in 2022."

The ruble has become a non-convertible currency due to severe central bank restrictions in Russia. There are several exchange rates at once.

Why the ruble has weakened

Bloomberg analysts noted that the reasons for the weakening of the ruble are:

• a significant deterioration in foreign trade conditions;
• international sanctions.

That's why the revenues of major Russian exporters in July-2023 fell to $6.9 billion compared to $16.8 billion in the same period last year. The Russian economy was hit hard, as these funds are a key source of hard currency for Russia.

The fall of the ruble is also affected by capital outflows:

• households have transferred about $40 billion to foreign banks as ruble interest rates have failed to meet inflation expectations. "An increasing number of Russian banks have found themselves cut off from global payment systems."
• Russians' deposits in foreign banks rose to $66 billion in June-2023.

One of the worst currencies

The ruble has already weakened by 23% against the dollar in 2023, which made it one of the 3 emerging markets currencies with the worst performance together with:

• Turkish lira;
• Argentine peso.

At the same time, analysts note that the situation will only worsen in the future. After all, there are no reasons for improvement of the ruble in the near future.

As reported by OBOZREVATEL. the Russians bought Tether cryptocurrency on the day of the Prigozhin rebellion en masse. The reasons are fear of the weakening of the ruble and the desire to find an alternative.

Only verified information from us in Telegram-channel Obozrevatel and Viber. Do not fall for fakes!