RT.com
29 Jun 2022, 18:43 GMT+10
The government has been debating whether the trend is good or bad for the economy
The Russian government is split on how to handle the strengthening ruble, with the Central Bank and Finance Ministry voicing opposing views on whether the current exchange rates should be maintained.
Since its historic drop in early March when the Western sanctions were unleashed, the ruble has rallied to a seven-year high against the US dollar and the euro. The Russian currency has been bolstered by strict capital controls, soaring energy prices, and the shift to ruble payments for natural gas. However, this has led many experts and officials to wonder whether the government should intervene.
The head of Russia's Central bank, Elvira Nabiullina, who steered the economy through the fallout from the start of the conflict in Ukraine and the resulting sanctions, warned on Wednesday against weakening the ruble to pre-war levels. Any intervention would make the exchange rates artificial, lead to depreciation, and make Russia more dependent on the financial policies of other countries, she said.
At the same time, the Finance Ministry has been sounding the alarm over the exchange rate, warning that the strengthening ruble is harming the economy. Finance Minister Anton Siluanov said on Wednesday that the strong ruble is costing the Russian budget trillions, and the ministry is ready to take steps to weaken it. He suggested that the government could use the profits from oil and gas exports and savings made from reduced spending to buy foreign currency, adding that Russia could invest in the currencies of "friendly nations," now that the euro and the dollar are essentially "toxic" due to the sanctions.
The Economic Development Ministry holds a similar view, saying that the strong ruble makes export-oriented businesses unprofitable. However, according to the minister, Maxim Reshetnikov, buying foreign currency with budget savings would hit the economy hard.
Western currency strategists have been skeptical about the rallying ruble, claiming it is being kept artificially high by the government, while the economy is shrinking. Over the past few weeks, the Central Bank has relaxed some of the capital control measures to try and weaken the ruble, but it continues to get stronger. Last month, Bloomberg called the ruble the world's best-performing currency this year.
For more stories on economy & finance visit RT's business section
(RT.com)
Get a daily dose of Broadcast Communications news through our daily email, its complimentary and keeps you fully up to date with world and business news as well.
Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to Broadcast Communications.
More InformationFRANKLIN, Tennessee: Hundreds of thousands of Nissan and Infiniti vehicles are being recalled across the United States due to a potential...
REDMOND, Washington: Microsoft is the latest tech giant to announce significant job cuts, as the financial strain of building next-generation...
LONDON UK - U.S. stock markets were closed on Friday for Independence Day. Global Forex Markets Wrap Up Friday with Greeback Comeback...
SANTA CLARA, California: Nvidia came within a whisker of making financial history on July 3, briefly surpassing Apple's all-time market...
SACRAMENTO, California: California's multibillion-dollar farms are facing a growing crisis—not from drought or pests, but from a sudden...
WASHINGTON, D.C.: President Donald Trump says the United States could soon reach a trade deal with India. He believes this deal would...
SHARJAH, 7th May, 2025 (WAM) -- The Sharjah Broadcasting Authority (SBA) recently took part in the 76th World News Media Congress,...
Paris is withdrawing its troops after the African country scrapped a decades-old defense agreement France has handed over a military...
New Delhi [India], July 1 (ANI): On the occasion of the approval of the new 'Khelo Bharat Niti 2025', Prime Minister Narendra Modi...
Mumbai (Maharashtra) [India], July 1 (ANI): The Indian Institute of Creative Technologies (IICT) opens admissions for its first batch...
New Delhi [India], July 1 (ANI): In a significant step to bolster India's research and innovation ecosystem, the Union Cabinet on Tuesday...
Welcome to Wider Europe, RFE/RL's newsletter focusing on the key issues concerning the European Union, NATO, and other institutions...