In Moscow’s stock exchange, the Russian currency surpassed the symbolic threshold of 100 rubles to the dollar, despite the Central Bank’s efforts to halt its decline.
On Monday, the ruble hit a low of 100.18 against the U.S. dollar, the weakest since late March 2022.
It’s worth noting that the ruble’s all-time low was recorded on March 11, 2022, at 120 rubles per dollar, shortly after the onset of the conflict in Ukraine.
Furthermore, the ruble continued its slide against the euro, being traded at 109.81 rubles per euro, a level not seen since March 23 of the previous year.
This ongoing devaluation can be traced back to an unsuccessful armed uprising around June 23-24, led by the head of the Wagner Group, Yevgeny Prigozhin.
However, the Central Bank of Russia’s vice-president, Alexéi Zabotkin, expressed confidence in the country’s financial stability while also hinting at potential interest rate hikes due to rising inflation.
The ruble’s depreciation of 7.7% in July, coupled with a 26.4% drop in the first seven months of the year, wasn’t deterred by the Central Bank’s recent move to suspend domestic currency purchases to stabilize financial markets.
The Central Bank identified a trade imbalance as the key reason for the ruble’s decline, emphasizing a one-third decrease in export values since the latter half of 2022.
This reduction coincided with Western sanctions capping Russian oil prices at US$60 per barrel, oil being Russia’s primary foreign exchange earner.
These Western sanctions notably impacted hydrocarbon export revenues, as gas prices plummeted to one-tenth of their value compared to the previous year, while imports approached pre-conflict levels.