Russia’s Ruble falls as commodity boom fades!
The Currency market is hectic before the holidays!
The Russian ruble is one of the world’s worst performing currencies this month as the oil-and-gas windfall that has helped insulate the country against Western sanctions this year fades.
Tweet on Ruble decline
The Russian ruble is one of the world’s worst performing currencies this month!
The ruble has fallen 9.4% this week and 14% this month against the $#usd #rubla #CurrencyWatchlist pic.twitter.com/qJP5hYUbxu
— The_Journalbiz (@the_journalbiz) December 21, 2022
Chart by Tullet Prebon on Ruble decline
The ruble has fallen 9.4% this week and 14% this month against the U.S. dollar. The currency’s December decline is the largest among 49 currencies tracked by The Wall Street Journal.
- In recent market action on Wednesday, $1 bought about 71.6 rubles, the most since April.
Analysts say Russia’s deteriorating trade surplus is driving the ruble’s weakness. One key factor: a Western effort to cap Russia’s oil revenues that went into effect earlier this month.
“We’re seeing lower oil shipments already from Russia, but these are just early weeks,” said Elina Ribakova, deputy chief economist at the Institute of International Finance. “Now we will actually see how the energy sanctions work.”
Imports have also picked back up after plunging in the immediate aftermath of the war as companies rushed to cut ties with Russia.
While imports from the West remain depressed, imports from China and Turkey have recovered strongly, as Ms. Ribakova expects Russia’s current account-surplus to fall by at least half next year. It jumped to $226 billion this year through November, compared to $109 billion last year, thanks to soaring prices for Russia’s oil and gas exports.
