The value of the ruble fell by almost 20% at the end of November against the dollar, without warning: behind this revaluation against Moscow, we find several cyclical factors, as well as structural problems resulting from the conflict against Ukraine.
An economy centered on the army
Overheated by the war against kyiv, the Russian economy has managed to maintain strong growth, while many citizens benefit from the economic fallout linked to the conflicts, notably the high salaries put in place by the army and the defense industry. .
This state of affairs, however, hides the serious problems affecting Russia: uncontrolled inflation has pushed the central bank to place the key interest rate at 21%, the highest level since 2003, while sanctions complicate the access to many Western products.
Ukraine – Russia: military planes of the war
Moscow has been hit by a new crisis for several days: the exchange rate between the American and Russian currencies quickly fell, with 1 dollar exchanging for 114 rubles on November 27 according to Xe, against 97 on November 1. This is the lowest rate since the peak in March 2022, when 1 dollar could obtain more than 130 rubles, and the second most extreme in the last ten years.
This exchange rate remains questionable: the sanctions applied in recent years have pushed Russia to suspend the exchange between rubles, dollars and euros in June 2024 within the Moscow Stock Exchange, blurring the real value of the Russian currency .
Sofia Donets, economist at Tinkoff Investments cited by Meduza, points out that the exchange rate between the ruble and the yuan has also experienced major upheavals, reaching 15.79 rubles per 1 yuan on November 27, against 13.7 on first of the month.
A dollar strengthened since Trump's victory
Several factors can explain this sudden collapse. American sanctions were strengthened on November 21, targeting in particular more than 50 banks, including Gazprombank, still connected to the SWIFT system. We can also cite the drop in oil prices, after several peaks linked to conflicts in the Middle East, the sudden increase in imports linked to the holidays, and the increase in spending by the Russian government at the end of the years, linked to imports. to supply state companies. The value of the dollar has generally increased against other currencies, including the euro, since the re-election of Donald Trump.
However, several other arguments in favor of Moscow should mitigate this sharp drop: the rise in interest rates should increase the value of the ruble by pushing investors to keep their money in high-yielding accounts, while reducing the number imports, often financed through loans. The value of a barrel of oil also remains high, despite the notable drop since the price surge in October.
Moscow, already in difficulty due to its inability to easily obtain many goods produced in the West and vital to its military-industrial complex, therefore risks having to spend even more money to prolong its war effort, while the population Russia at the same time loses a substantial part of its purchasing power.
