Lazy eyes listen
Despite increased export revenues and capital curbs imposed by the central bank, the Russian ruble has dropped to its lowest level since March 2022, touching 101 against the US dollar on Monday.
The ruble also fell to 111 per euro, a 16-month low.
The ruble fell to a historic low of 120 per dollar in March of last year before rebounding to a more than seven-year high a few months later. So far this year, the ruble has lost approximately 25% of its value against the US dollar.
The Bank of Russia stated last week that it would cease purchasing foreign currency on the domestic market as part of a budgetary mechanism designed to cushion the economy from unpredictable commodity prices.
Despite the steep devaluation, Maksim Oreshkin, President Vladimir Putin’s economic adviser, believes the ruble will stabilize.
“The current exchange rate has deviated significantly from fundamental levels, and its normalization is expected in the near future,” Oreshkin was quoted as saying by TASS.
“A weak ruble complicates the economy’s structural transformation and negatively affects the population’s real incomes,” he warned. “It is in the interests of the Russian economy to have a strong ruble.”
Previously, the Bank of Russia and the Finance Ministry attributed the ruble’s decline on changes in the trade balance.
The decline, according to Oreshkin, is the result of the regulator’s monetary policy.
“The central bank has all the tools at its disposal to normalize the situation in the near future and ensure that lending rates are reduced to sustainable levels,” he said.