Photo: Mundane Rossiya
Russia’s currency has steadily declined since the Ukraine crisis, thanks to economic sanctions from the international community. With the dollar enjoying strong growth, renewed fighting in Ukraine renew and oil prices falling, the conditions are extremely negative for the ruble.
Indeed, the currency saw its value decline 11 per cent this week, according to Business Insider, its biggest weekly drop since 1998.
Dr Nicholas Spiro, managing director of Spiro Sovereign Strategy, told the site: “Russia has a full-blown currency crisis on its hands. This is an all too familiar test of wills between a central bank that’s perceived to have lost credibility and increasingly bearish investors who have been scenting blood for some time now. Everything that Russia’s central bank has done up until now – stepping up the pace of its interventions and hiking interest rates aggressively – has patently failed to stabilise the rouble.”
Today, the ruble rebounded slightly, reports Bloomberg, with the currency climbing 1.2 per cneet to 46.30 per dollar on the back of expectations that Russia’s central bank will take new steps to intervene.
The increase, though, is far from a reversal of the prevaling current, with Ivan Tchakarov, the chief economist at Citigroup in Moscow, highlighting how hard it is to observe a clear trend during the current climate.
“The turnaround must be related to speculation about possible CBR actions,” he said in an email. said by e-mail. “The market is very jittery now and it responds to any rumors, speculations etc. I don’t think what we have been seeing the last couple of days can in any way be linked to market fundamentals.”
Source: The Movechannel