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Exchange office in Moscow
Photo: IMAGO/Vyacheslav Prokofyev / IMAGO/ITAR-TASS
After the Russian invasion of Ukraine began, the declining ruble was the most immediate consequence of the war that Russian citizens felt.
In the meantime, the Russian currency has lost almost half its value compared to the dollar and euro.
Five weeks after the outbreak of war, however, the situation is currently different. The stabilization measures taken by the Russian leadership seem to have been successful.
Not only was the ruble's fall stopped, but the Russian currency was able to almost completely recoup the losses it had lost.
A dollar currently costs around 81 rubles – before the outbreak of the war it was 75 rubles.
The ruble has also made up ground against the euro.
Good news for the Kremlin
Russia responded to the ruble crash in February with a whole series of steps.
For example, Russian export companies were obliged to convert 80 percent of their foreign exchange earnings into rubles within three days.
Transactions by foreign investors were restricted.
Russian citizens have been banned from taking more than $10,000 out of the country.
International transfers have been capped at $5,000 per month.
Commercial banks were also banned from selling foreign currency to citizens for rubles at least until September.
For the Russian leadership, the stabilization of the currency is an important development, because otherwise the massive devaluation of the currency could drastically reduce the savings and purchasing power of the Russian population and thus stir up social resentment.
One of the reasons for this is the fact that numerous consumer goods are not produced in Russia, but have to be imported from abroad at great expense.
Because they often have to be paid for in dollars or euros, when the ruble falls, the price that Russian customers end up paying in stores in Moscow or Saint Petersburg increases.
In fact, the prices of many goods had skyrocketed.
The official inflation rate rose to more than 15 percent last week.
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