Amid escalating tensions and economic challenges, the Russian Ruble has faced an alarming deterioration, plummeting by nearly 40% against the US dollar over the past six months. This unprecedented decline sees the Ruble trading at a distressing rate of over 101-to-1 against the US dollar, emphasizing the severe ramifications of the ongoing Russian invasion of Ukraine.
The dollar rose by 1.59 RUB, or 1.6%, to 101.03, according to the Moscow Exchange data as of 11:14 Moscow time. The last time the dollar traded above 101 was almost a year and a half ago, on March 23, 2022.
At the same time, the euro exchange rate added 1.89, or 1.73%, to 110.67.
The economic aftershocks of this military conflict, met with universal international disapproval, have wreaked havoc on the Russian economy. The ramifications of the invasion are profound: Russia is now ensnared in a comprehensive web of international sanctions, unilaterally executed by the US, EU, and other global stalwarts.
The PSB Bank analysts still believe that the current phase of the ruble weakening is primarily associated with imbalances in the balance of payments, that is, with a limited supply of foreign currency from exporters with stable demand from importers.
“Perhaps, the current levels, despite the oversold of the Russian currency, contribute to the activation of purchases by speculative participants, setting them up to maintain increased volatility and trading activity in the foreign exchange market,” the bank authorities added.
“During the session, the pressure on the ruble may continue against the backdrop of a deteriorating situation on the energy market,” said Bogdan Zvarich, chief analyst at the Banki.ru financial platform, in his morning review.
Final Thoughts and USDRUB Outlook
The ruble is weakening against the backdrop of an imbalance in export-import operations. But the Russian currency has the potential for recovery, it may be partially realized in the coming weeks.
At the same time, most analysts admit that in the near future the dollar may try to reach the next target level of USDRUB 105. But analysts believe that the attempts will be short-term, as this zone for the dollar looks unjustified from a fundamental point of view. National banks’ actions and
