The influential TV host Vladimir Solovyov said last week: “The bloody central bank isn’t even explaining why the hell the rouble exchange rate has jumped so high that they’re laughing at us abroad, at our rouble being one of the three weakest currencies. We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply.īut the sliding rouble could trigger memories in Moscow of the battering the currency took during the 1998 Russian financial crisis and has already led to rare public criticism of Russia’s central bank. For more information see our Privacy Policy.

Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. A government document reviewed by Reuters this month showed that Moscow had doubled its 2023 defence spending target to more than $100bn (£79bn), a third of all public expenditure.

Russia sells its oil in foreign currency and the current exchange will buy more roubles at home. In the short term, a weaker rouble could help the authorities to fund its extensive war spending. But the move did not immediately stop the currency’s decline, raising worries among Russian policymakers of the possibility of significantly higher consumer prices. Last week the Russian central bank took steps to stabilise the rouble, holding purchases of foreign currency until 2024 “to reduce volatility”. “It is in the interests of the Russian economy to have a strong rouble.” “The current exchange rate has deviated significantly from fundamental levels, and its normalisation is expected in the near future,” Vladimir Putin’s economic adviser Maxim Oreshkin said in an op-ed for the Tass news agency. Without capital controls, speculators would have priced in the poor outlook last year.”Ī senior Kremlin aide admitted on Monday that a weak rouble had a “negative effect” on the “population’s real incomes” but said Moscow expected the currency to bounce back shortly. The fall in the rouble accelerated after the aborted uprising in June by Yevgeny Prigozhin and his Wagner group of mercenary fighters caused Russians to move money into foreign accounts.ĭr Janis Kluge, a researcher who focuses on the Russian economy at the German Institute for International and Security Affairs, a thinktank, said: “The Russian rouble is still searching for its appropriate long-term war-sanctions exchange rate. The government has spent billions on the defence industry to continue the war in Ukraine, with many critical goods still coming from abroad. Russian oil revenues have been drastically reduced since western price caps and embargos were imposed, while imports have recovered. The rouble has had a period of turbulence since Russia invaded Ukraine in February 2022, dropping to a record low of 150 to the dollar two weeks after the start of the war before sharply recovering after the Russian central bank imposed strict capital controls that limited the flow of money out of the country.īy last summer the rouble had rebounded to a seven-year high as a rise in oil and gas prices, partly a result of the invasion, helped Russia raise export revenue while consumer imports fell. However, in the afternoon the Bank of Russia made the surprise announcement that its board of directors would meet on Tuesday to discuss the interest rate, with a decision to be published at 10.30am Moscow time. On Monday morning, the central bank said it saw no threat to Russia’s financial stability from the rouble’s fall, blaming the currency’s slide in value on a drop in export volumes and growing internal demand for imports. The decline has led to calls from senior Kremlin officials for higher borrowing costs. It has weakened by 26% this year as a result of a collapse in export revenues and growing military spending, making it the third worst-performing global currency in 2023.

Dollar rate in russia