The ruble is doing well despite the sanctions imposed by the West

One Russian ruble deposited on the symbol of Russian currency.

Moscow, August 13, 2021. AFP - KIRILL KUDRYAVTSEV

Text by: RFI Follow

2 mins

The Central Bank of Russia announced on Friday April 8 that the sale of foreign currencies to citizens would again be authorized from April 18.

The ban was taken in early March when the ruble was particularly weak, but since the measures taken by the Russian authorities, the national currency has continued to strengthen despite foreign sanctions.

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77 rubles for one euro: a record level since June 2020. A performance that can be explained by various factors.

First an unprecedented trade surplus.

While imports have declined sharply, exports remain solid.

A trade surplus estimated at twenty billion dollars for the month of March. 

High hydrocarbon prices are also contributing to the strength of the ruble.

Russia's oil and gas taps remain open.

The various embargoes today only concern about 5% of Russian exports, according to some experts. 

Added to this is the important role of the Russian Central Bank.

Faced with the freezing of Russian capital held abroad (nearly 300 billion dollars), it imposed significant capital controls.

Exporting companies, for example, were forced to sell 80% of their export earnings to buy rubles.

Individuals, limited to buying $10,000 per month. 

Future challenges

However, this dynamic of the ruble does not hide the economic challenges that Russia must or will have to face.

Inflation, for example, which rose to more than 16% over the last year.

The rise in prices amounted to more than 7% over the last month, a record since the 1990s.

Financial rating agency S&P on Saturday lowered Russia's rating for foreign currency payments to "selective default" level after Moscow settled a dollar debt in rubles earlier this week. 

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To read also: Payment of gas in rubles: Putin's bluff?

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