Despite the European Commission’s proposed oil ban, the Russian ruble has shown extraordinary resilience, rising over 10% against the dollar and euro within a week.
The Russian ruble soared to a two-year high against the dollar and the euro today. Despite decreasing interest rates twice in a short period, the ruble has maintained its upward momentum.
At the time of writing, the ruble was trading at 65 against the dollar, indicative of an 11.34% gain within 5 trading days. The rubles also made significant gains against the Euro, trading at 68. This is indicative of an 11.11% gain within 5 trading days.
What you should know
- The European Commission proposed this week a comprehensive embargo on Russian oil imports into the EU. Three big Russian banks would be cut off from the SWIFT international banking payment system as part of the new sanctions.
- The measures, which will require the consent of all 27 EU member states, are the most recent in a series of western sanctions aimed at reducing the Kremlin’s ability to wage war on Ukraine by focusing on the Russian economy’s pillars.
- Despite rising sanctions aimed at crippling Russia’s economy, energy exports have been a vital source of money. Before the planned restriction, Russia was on track to earn over $321 billion from energy exports this year, up more than a third from the previous year, based on Bloomberg.
- Due to high energy prices, Russia expects $9.6 billion more in energy sales in April than it had anticipated. The EU oil embargo, if it is passed, would result in a loss of part of Russia’s anticipated revenue for future transactions and a slowdown in currency demand.
- The Russian ruble has witnessed significant gains against the US dollar in the last month. At the time of writing, the ruble was up 22.29% against the dollar and 25.37% against the euros
- Market participants are questioning if the current rate is sustainable in light of the restrictions. However, the ruble has shown resilience after making a remarkable comeback from its record low in early March, when Western nations imposed unprecedented sanctions on Moscow and its financial system.