Russia's ruble is at its strongest level in 7 years despite massive sanctions. Here's why - 23 iunie 2022
Russia’s ruble hit 52.3 to the dollar on Wednesday, an increase of roughly 1.3% on the previous day and its strongest level since May 2015.
That’s a world away from its plunge to 139 to the dollar in early March, when the U.S. and European Union started rolling out unprecedented sanctions on Moscow in response to its invasion of Ukraine.
The reasons are, to put it simply: strikingly high energy prices, capital controls and sanctions themselves.
Russia is the world’s largest exporter of gas and the second-largest exporter of oil. Its primary customer? The European Union, which has been buying billions of dollars worth of Russian energy per week while simultaneously trying to punish it with sanctions.
But does the ruble’s strength mean that Russia’s economic fundamentals are sound and have escaped the blow of sanctions? Not so fast, analysts say.