Key Points
- The Russian Ruble has slumped harder against the US Dollar as it trades at a near 17-month low.
- President Vladimir Putin’s economic advisor blames loose monetary policy for the rapid depreciation of the Ruble.
- The Bank of Russia blames the country’s shrinking trade balance as its current account surplus fell 85% YoY from January to July.
Russian Ruble fell to 17-month record levels of 100 per USD on Monday as the country battles a shrinking trade balance. The current account surplus dropped by 85% YoY from January to July as Western sanctions pushed the country further.
Russian Ruble trades at 100 against the US dollar
Since Russia invaded Ukraine, the country has been experiencing turmoil with holding up the value of the Rubble as harsh economic sanctions from the West have been imposed on it. The West has also been aiding Ukraine economically in the war, which prompts Russia to spend more to sustain its offensive missions.
As an aftermath, the Russian Ruble slid past the 100 mark against the USD on Monday, nearing a 17-month low. The country’s presidential economic advisor blamed loose economic and monetary policy for weakening the Rubble.
This year alone, the Ruble has lost value by 30% against the greenback. This situation has prompted the Bank of Russia to blame the country’s balance of trade as its current account surplus fell 85% year-on-year from January to July.
“A weak ruble complicates the restructuring of the economy and negatively affects the population’s real incomes. In the interests of the Russian economy — a strong ruble,” President Putin’s economic advisor Maxim Oreshkin said.
Last week, the Bank of Russia halted foreign currency purchases for the remainder of the year to shore up the currency as the country battles increasing isolation from Western sanctions.
While fears of rising inflation grip Russia, its GDP exceeded expectations and grew by 4.9% year on year in Q2, per figures from the Federal State Statistics Service, which s a rebound from a 1.8% contraction in Q1. Keep watching Fintech Express for more updates on finance and other fintech-related developments.