At 15.38 hours Turkish time, the Russian ruble appreciated by 6.3 percent, reaching its highest level against the Euro since the beginning of June 2015.
HOW DID IT RISE DESPITE THE CRISIS?
Despite the economic crisis in Russia, the ruble has gained 30 percent against the dollar this year, making it the world’s top performing currency. However, the artificial support provided by the capital control implemented to protect Russia’s financial sector after the sanctions decisions taken by the Western countries due to the Ukraine invasion also plays a part in this.
The Russian ruble also gained in value as export-oriented firms were required to convert their foreign currency income into rubles after the sanctions of Western countries froze nearly half of Russia’s gold and foreign currency reserves.
Experts from Tinkoff Investments, the intermediary institution of Russian bank Tinkoff, note that the ruble may continue to strengthen in the medium term, while the Central Bank and the government continue to impose restrictions.
Experts say, “Towards autumn, with the recovery of imports and the removal of restrictions, the exchange rate may begin to stabilize.”
YEAR-END FORECASTS
Otkritie Bank experts also predict that 1 dollar will be worth 55 rubles in a month, and that the ruble will depreciate to 70 to 80 per dollar at the end of the year.
Experts say that the demand of foreign buyers to make their payments in rubles against the natural gas sold by Russia is also effective in the appreciation of the ruble.
IS THE CENTRAL BANK INTERVENTION?
The Russian business-oriented newspaper Vedomosti, citing its sources and published on Monday, reported that the Central Bank has started buying foreign currency to curb the uncontrolled appreciation of the ruble.
The Central Bank denied this news and made a statement, “This information is not in line with the truth.”
Experts from Russian bank Promsvyazbank, on the other hand, said that if the Central Bank intervenes, the effects on the ruble will be much more noticeable.
“Nevertheless, news like this can affect the behavior of market participants and trigger a depreciation of the ruble,” the experts said.