RT.com
30 Jun 2022, 01:43 GMT+10
Officials have been debating whether the trend is good or bad for the economy
The Russian government is divided 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 unprecedented 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 February 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 Iraq Sun 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 Iraq Sun.
More InformationWASHINGTON, D.C.: Ten Democratic lawmakers in the U.S. House of Representatives have asked the Pentagon to reduce military training...
TORONTO, Canada: An initial investigation into last month's dramatic Delta Air Lines crash-landing in Toronto has revealed that the...
NEW YORK CITY, New York: New York State's highest court has struck down a law this week that would have allowed over 800,000 legal...
The death toll in Gaza on the weekend has passed 50,000, local health authorities have reported. What started the carnage was the Hamas-led...
WASHINGTON, D.C.: The U.S. Department of Agriculture (USDA) has announced plans to invest up to US$100 million in research to develop...
WASHINGTON, D.C.: The U.S. Department of Health and Human Services (HHS) has removed a 2024 advisory from its website that called gun...
WASHINGTON, D.C./DUBAI: The United Arab Emirates is significantly expanding its financial footprint in the U.S. with a new investment...
The death toll in Gaza on the weekend has passed 50,000, local health authorities have reported. What started the carnage was the Hamas-led...
NEW YORK, New York – Israeli military forces caused deaths and unnecessary suffering of Palestinian patients while occupying hospitals...
Israel Air Force pilots have bombed a funeral in northern Gaza, killing more than a dozen mourners. Family and friends of Dr Wasim...
Elon Musk's Teslas' are in the running to take over the transport of Israel's government officials. Musk's company, Tesla Inc., has...
Washington, DC [US], March 26 (ANI): In line with high-level discussions between US President Donald J Trump and Ukrainian President...