Ruble Weakens Toward 100 Per Dollar
The Russian ruble has weakened to its lowest level in 16 months, nearing the 100 per dollar mark. The currency has been under pressure due to a combination of factors, including the country’s economic crisis, the decline in oil prices, and the impact of US sanctions.
Economic Crisis
Russia’s economy has been in a state of crisis since the start of 2020. The country’s GDP has contracted by more than 5%, and the unemployment rate has risen to its highest level since the early 2000s. The crisis has been exacerbated by the decline in oil prices, which has had a significant impact on the country’s budget revenues.
Decline in Oil Prices
The decline in oil prices has been a major factor in the weakening of the ruble. Oil is one of Russia’s main exports, and the decline in prices has had a significant impact on the country’s budget revenues. The decline in oil prices has also had a negative impact on the country’s balance of payments, as the country has been unable to export as much oil as it had in the past.
Impact of US Sanctions
The US has imposed a number of sanctions on Russia in recent years, which have had a significant impact on the country’s economy. The sanctions have made it more difficult for Russian companies to access international capital markets, and have had a negative impact on the country’s balance of payments.
Central Bank Intervention
The Russian Central Bank has been intervening in the currency markets in an attempt to prop up the ruble. The bank has been buying rubles in an effort to support the currency, and has also raised interest rates in an effort to attract foreign investors.
Outlook
The outlook for the ruble remains uncertain. The currency is likely to remain under pressure in the near term, as the country’s economic crisis continues and the impact of US sanctions persists. The Central Bank’s intervention may help to support the currency in the short term, but it is unlikely to be enough to reverse the trend in the long term.