While the ruble fell by tens of percent against the dollar and the euro in the immediate aftermath of the invasion of Ukraine by Russian troops, in recent days the ruble has not only stabilised, but is even starting to strengthen. And it is only a few percent short of reaching its pre-war level.
Russia’s reaction
On the eve of the Russian military invasion of Ukraine, one US dollar could be bought on the foreign exchange market for less than 79 roubles. After 24 February, however, the ruble began to weaken sharply.
When the West imposed the harshest sanctions yet on Russia in the form of a freeze on the foreign exchange reserves held abroad by the Russian central bank, the ruble broke the 140 ruble mark against the US dollar. The Russian currency lost almost half of its value.
Strenghtening?
But since then, the ruble has not only stabilized, but has started to strengthen slightly. Significant hardening came after March 22, when Russian President Vladimir Putin said Russia would sell its gas, oil and other commodities to hostile countries exclusively in rubles. By the end of March, the rouble had fallen below 84 roubles against the dollar, the strongest level since the beginning of the invasion.
And only about six percent above the pre-war rate. Further developments will depend on the West’s attitude to Putin’s request.
