The ruble continued its fall that began several days ago on Wednesday, against a backdrop of escalating Russian-Western tensions around Ukraine and new American sanctions, exceeding for the first time since mid-March 2022 the threshold of 110 for 1 dollar.
The Russian currency, very volatile for three years, was officially trading at 110 rubles against the greenback at 11:20 GMT, according to the Ria Novosti news agency, citing market data.
One euro traded for 115.7 rubles on Wednesday.
We had to go back to the first quarter of 2022, in the very first weeks of the Russian offensive in Ukraine, to see the ruble so weak against the dollar (1 against 120 rubles officially on March 11, 2022) and the euro, when the Westerners had implemented a barrage of sanctions to try to shake up the Russian economy.
Elections and sanctions
In recent days, the uncertain geopolitical context around Ukraine – with the arrival in January of the unpredictable Donald Trump at the White House – seems to be affecting investor confidence in the ruble, in the same way as the latest American sanctions against Moscow.
Last week, Washington announced a series of sanctions targeting around fifty Russian banks, including Gazprombank, the financial arm of the state gas giant Gazprom, used in particular for energy payments with foreign customers.
These restrictions also target other small or medium-sized establishments that Russia is suspected of using to channel its payments for the equipment and technologies it acquires.
In effect, a weaker currency means that Russia’s exports are cheaper on world markets, but also that Russians have to spend more to import products from abroad, raising fears of fueling the persistent inflationary spiral.
Before the conflict, the dollar was trading at the beginning of 2022 around 1 for 75-80 rubles on average.
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