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The Battle of the Ruble Written by: Muhammad Al-Jassem

2022-06-04T13:39:26.142Z


Contrary to the opinions and analyzes that expected the devaluation of the Russian ruble against the backdrop of Western sanctions imposed on the country


Contrary to the opinions and analyzes that expected the devaluation of the Russian ruble against the backdrop of Western sanctions imposed on Russia following the military operation in Ukraine in late February, the ruble rose in recent weeks against the dollar and the euro to record levels.

The ruble continued to rise, recording at the end of this week less than 62 rubles against the dollar, and the euro exchange rate reached by 17’2 to 62.13 rubles, while Russian estimates showed that the ruble’s exchange rate rose on the Moscow Stock Exchange against the dollar by 15.4 percent last May.

The rise in the value of the ruble was attributed by economists to the smart economic measures taken by Russia to preserve the value of its currency, including the decision of the Russian Central Bank to suddenly reduce the main interest rate by 3 percent to 11 percent annually.

Another factor that prevented the collapse of the ruble was the decision of Russian President Vladimir Putin in late March to collect the price of Russian oil and gas exports to unfriendly countries in rubles, through a complex mechanism that includes the establishment of two linked bank accounts to deal with foreign exchange, which prompted those countries, especially European, to The search for the Russian currency to pay for its imports, which greatly boosted the value of the ruble.

These measures forced about 54 foreign energy companies linked to contracts with the Russian oil company "Gazprom" to open accounts to pay their payments in Russian currency instead of euros and dollars.

The decision to pay in rubles has economic goals, including increasing the demand for the Russian currency, and it also has an advantageous meaning that comes in the context of Russia’s attempt to break the dominance of the dollar and the euro, and this step was made to remind the Europeans of their degree of dependence on Russian resources, especially gas, because they persist in imposing sanctions and claim in At the same time, their willingness to give up Russian gas.

The ruble battle is a very important battle for the Russians in the context of their ongoing military operation, and they are waging a fierce defensive war on it, especially since Russian officials realize that the Europeans who are most affected by Western sanctions on Russia are the Europeans who are not able to give up Russian oil and gas, and therefore they will pay the price. Those unjust sanctions, whether in terms of rising prices and inflation in their countries, or in terms of losing thousands of related jobs.

Despite the economic pressures on Russia, the ruble has become one of the strongest global currencies, so that the US CBS TV channel described the ruble a few days ago as the most stable and effective currency this year, while analysts confirmed that the ruble not only regained its lost positions, but also strengthened by more than 30% to become emerging market currency.

Source: sena

All news articles on 2022-06-04

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