Citing calculations based on trading data, Bloomberg listed the Russian ruble among the three worst performing emerging-market currencies – alongside the Turkish lira and the Argentine peso – due to the depreciation in recent weeks.
The Russian currency, which overall has weakened by about 24% against the US dollar so far this year, has been weakening since early June, when one dollar traded for 80-81 rubles, but dropped to a new 16-month low at 98 rubles – the weakest level since late March 2022 – earlier this week.
The weakening of the ruble, according to the Russian central bank, is due to the decline in exports prompted by Western sanctions, which are changing foreign trade balance, and increased imports.
The ruble’s depreciation also “comes down to capital outflow,” argues Bloomberg economist Alexander Isakov, noting that Kremlin’s rising expenditure is boosting the demand for imports while households have been increasingly transferring money to foreign banks prompted by decreasing ruble interest rates that fail to meet inflation expectations.
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