While the US dollar has appreciated against a basket of fiat currencies around the world, the Russian ruble is up 4.5% against the dollar this week. During the first week of September, Russia told the press that China would pay for natural gas in rubles and yuan. Moreover, Switzerland’s imports of Russian gold have reached a level not seen since April 2020.
The dollar is rising, but the Russian ruble is also rising
The US Dollar Currency Index (DXY) this week soared to new heights leaving a large number of fiat currencies around the world severely affected. For example, two days ago, the euro in the European Union hit a 20-year low against the US dollar, and it fell to $0.973 on Friday.
At the moment, the euro is down even at $0.9690, and it is down 2.82% against the dollar over the past 30 days. The 30-day stats show the Yen down 4.72%, Sterling down 8.17%, and the Canadian Dollar losing 4.78%. The Chinese yuan breached the 7:1 exchange rate against the US dollar for the first time in two years.
However, the ruble, Russia’s original official currency, was more flexible this year, and began to gain ground a month after the start of the Ukraine-Russia war. Towards the end of June, the Russian ruble hit a seven-year high against the US dollar, at which time economists said “Don’t ignore [ruble’s] exchange rate.”
This Friday, while the original US currency rose to new levels against various currencies around the world, the ruble rose by 4.5% against the US dollar. The ruble was able to do so while DXY broke through to its highest level in 20 years after the latest Fed rate hike. The ruble’s rise came on the heels of Russian President Vladimir Putin’s explanation earlier this week that he had vowed to use “every means available” to win the war with Ukraine.
China pays for gas in rubles, Switzerland buys 5.7 tons of Russian gold in August, analyst says ruble withdrawals push currency higher
There were also hints of nuclear retaliation from the Russian president, and he made it clear that he was amassing more troops. Additionally, Reuters reported during the first week of September that China will buy fuel from Russia in ruble and yuan payments.
Alexey Miller, CEO of Gazprom, told the press at the time that paying China in rubles and yuan instead of dollars was “mutually beneficial” for both partners. Moreover, it is reported that the Swiss Federal Customs Administration revealed that Switzerland imported 5.7 tons of Russian gold reserves in August. The cache was worth about $324 million, and the Swiss hadn’t bought a cache this big in over two years.
However, the country’s customs department claims that the Russian gold originally originated from Britain, and further stressed that no financial penalties were violated. Switzerland has completely denied breaking any sanctions and said 5.7 tonnes of the bullion was originally shipped from the UK in May.
While the exchange rate of the ruble against the dollar has fallen slightly, it remains at 56.87 against the dollar, at the time of writing on Sunday, September 25, 2022. While the 30-day statistics show that the euro is currently down 2.82% against the US dollar, the Russian ruble is up up 4.32% this month.
Jeffrey Smith of Investing.com says the surge in cash derives from Russians withdrawing huge amounts of money from their savings accounts. Smith further claims that “the Russians emptied their savings accounts in the wake of President Vladimir Putin’s mobilization call on Wednesday.”
However, he noted that the increase in ruble withdrawals on Friday was not as large as the ruble withdrawals recorded last February. “The rise in demand for the ruble led to a contraction in the interbank ruble rates, which pushed the currency higher in the market,” Smith wrote on Friday.
What do you think about the significant appreciation of the Russian ruble on Friday and gaining 4.32% this month against the dollar? Tell us what you think about it in the comments section below.
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from San Jose News Bulletin https://sjnewsbulletin.com/while-us-dollar-puts-pressure-on-euro-pound-and-yen-russian-ruble-rise-against-dollar-bitcoin-news-economics/
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