Where the Russian ruble hit two records this week, with the dollar’s exchange rate falling below 57 rubles, for the first time since April of 2018, while the euro’s exchange rate fell below 60 rubles for the first time since April of 2017. .
This remarkable rise of the ruble comes after it had fallen after the outbreak of the war last March to historical levels, which approached the threshold of 150 rubles per dollar.
In order to find out the factors and backgrounds of this steadfastness and even the progress of the Russian currency, in light of strict economic and financial sanctions imposed on the country by the Western bloc, Amer Al-Shobaki, an economist and researcher specializing in the oil and energy sector, said in an interview with “Sky News Arabia”: “This improvement in The value of the ruble against the dollar and the euro is surprising to the Russians before the West, as a result of the fact that it is recorded in the midst of the massive sanctions imposed by Western countries on Russia, which are the largest throughout history as they have never been seen before even those imposed on countries such as North Korea, for example, or Venezuela and Iran, in terms of their quantity and number. Not its depth and impact.
Al-Shobaki added: “With the beginning of the imposition of sanctions, the ruble lost half of its value, reaching 150 rubles per dollar, which represented a huge loss and as a result the Russian Central Bank performed well, especially its director, Elvira Nabiullina, as it raised interest rates by 20 percent and then lowered them to 17 percent and finally 14 percent, i.e. a difference of only 5 percentage points from their prices before the war, which is 9 percent, in addition to preventing the withdrawal of any amount amounting to more than 10 thousand from bank balances in all its forms, and directing and obligating Russian companies, especially in the Russian oil and energy sectors, and even obligating them By placing 80 percent of its sales value in ruble balances in Russian banks, and other measures that contributed to the ruble absorbing the crisis and restoring it.”
He elaborates on the factors of the ruble’s strength and its overcoming of the sanctions crisis, by saying: “Now the ruble price is better than it was before the war, and even since 2018 against the dollar, and since 2017, against the euro, which seems surprising for a while, but this does not necessarily mean that the Russian economy has not been affected.” Negatively, by sanctions and war, he has been greatly affected, and the repercussions of these sanctions, especially the long-term, will show their effects later on the Russian economy.”
And he added, “In addition to the role of the Russian decision to require the payment of exported gas in rubles in the recovery of the Russian currency and the improvement of its value, the valuation of the ruble in gold and its price equalization with the yellow precious metal, such as a very smart and unconventional move by the Russian Central Bank, greatly contributed to this vitality experienced by the ruble. “.
One of the most important factors for this rise of the ruble, the expert and economic advisor says: “The Western sanctions were not stifling the Russian economy, but rather kept important outlets and pores for it, the most important of which is the continuation of Russian strategic exports such as energy, grain and food exports, which constitute a large part of the budget or income. The price of one ton of wheat has doubled, for example, by more than 100 percent, from 240 dollars before the Ukrainian war to 480 dollars according to the pricing of the American markets recently, and thus all this of course increased Russia’s revenues, especially as it is the largest exporter of wheat in the world.”
As for oil, he adds: “Its prices before this war were much lower than the current ones, as oil secured the Russian treasury $170 billion in 2021, and gas secured nearly $62 billion, but as a result of the steady rise in energy sources prices since the beginning of the year on the impact of the Ukrainian crisis, And then the war erupts, as it is now providing Russia with more money and revenues, and it is believed that it is now providing Russia with one billion dollars daily, and if energy prices continue to rise like this or even maintain the current pace of their prices, its annual revenues will jump to about 360 billion dollars, which is much more than Revenues from the sale of Russian energy in 2021, amounting to from 230 to 240 billion dollars, and thus this compensated the Russians a lot for what they lost in exports and as a result of the obstruction of the trading of their global financial banks due to the sanctions.”
And the expert in the oil and energy sectors continues: “And so Europe is still divided over the ban on Russian oil imports to the countries of the European Union, and oil in particular is what secures the huge revenues of the Russian treasury, and energy sales in general secure between 45 and 50 percent of Russian budget revenues, and oil Only he believes in this framework from 35 to 40 percent of public revenues, which reflects positively on the Russian economy, as Moscow can even repay its debts, especially since the West was betting on its inability to pay its sovereign debt in dollars.
And he concludes: “The inability of the Europeans to dispense with Russian energy sources remains one of the most important motives for the resilience of the Russian economy and currency, and even their absorption of the crisis, even if relatively. In contrast, we see how inflation rates are recording record rates in Western countries, in the United States and Britain, which have not been recorded since 40 years, and in the European Union it is the highest in 30 years, in addition to the historical rise in gasoline prices in Western countries, especially in America.”
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