Russian ruble sinks to lowest level since the start of Ukraine war
On Monday, the Russian currency passed 101 rubles to the dollar, continuing a more than 25 per cent decline in its value since the beginning of the year and hitting the lowest level in almost 17 months.
President Vladimir Putin’s economic adviser, Maksim Oreshkin, on Monday blamed the weak ruble on “loose monetary policy” in an op-ed for state news agency Tass. He said a strong ruble is in the interest of theand that a weak currency “complicates economic restructuring and negatively affects people’s real incomes.”
Oreshkin said Russia’s central bank has “all the tools necessary” to stabilize the situation and said he expected normalization shortly.At a press conference Friday, central bank deputy director Alexei Zabotkin said the bank is adhering to a floating exchange rate because “it allows the economy to effectively adapt to changing external conditions.
After Western countries imposed sanctions after the invasion of Ukraine in February 2022, the ruble plunged as low as 130 to the dollar, but the central bank enacted capital controls that stabilized its value. By last summer, it was in the 50-60 range to the dollar.
The central bank enacted a big increase of one per cent to its key interest rate last month, saying inflation is expected to keep rising and the fall in the ruble is adding to the risk. Zabotkin indicated that the rate – now at 8.5 per cent – could be hiked again at the next meeting on Sept. 15.
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