Upon Putin's intervention, the ruble's minimal worth experiences an increase in value.
The Russian ruble has experienced a slight improvement in value against the US dollar, now hovering around 0.01006 US cents per ruble. Previously, it required 99.50 rubles to obtain a single US dollar, exceeding the 100-ruble benchmark. This week's appreciation represents a six percent improvement, marking the strongest increase in over a year. Back in November, the exchange rate peaked at over 110 rubles per dollar.
The catalyst for this enhancement derives from a decree issued by President Vladimir Putin. Following his order, Russian gas buyers no longer are able to change currencies into rubles via Gazprombank, which is subject to American sanctions. As a result, the ruble appreciated by over one percent against the US dollar, as shown by the banking sector's over-the-counter records. Additionally, the ruble also gained by one percent in value versus the Chinese yuan at the Moscow Exchange, to reach 14.20 rubles.
The stronger ruble could potentially add fuel to the existing inflation, exacerbated by the Ukraine conflict. Putin's decree enables European clients of Russian gas, such as Hungary and Slovakia, to swap their money into rubles at banks not under sanctions, instead of using Gazprombank. This shift resulted in a 15 percent ruble depreciation against the dollar once the bank became the target of new US sanctions on November 22.
German Gref, who serves as the CEO of Sberbank, cited a fair value range for the ruble as between 100 and 105 rubles against the US dollar. While Gref acknowledged no prospects for a significant weakening of the ruble, Sberbank anticipates the exchange rate to reach 112 to 115 rubles per dollar by the end of the subsequent year.
A weaker ruble could further amplify the already exorbitant inflation in the country by making imports more expensive. Central Bank Governor Elvira Nabiullina admitted to this new inflationary factor. Consequently, analysts surveied by the Reuters news agency anticipate the Central Bank to raise its key interest rate from the current 21 percent to 23 percent on December 20.
The decree by President Putin impacted other currency exchange methods, as Russian gas buyers can no longer convert currencies into rubles via Gazprombank.Other European clients of Russian gas, not under sanctions, now have the ability to swap their money into rubles at these banks.
