Russian Ruble Rebounds Close to Prewar Level www.wsj.com/livecoverage/russia-ukraine-latest-news-2022-03-…
The Russian ruble strengthened close to its preinvasion level against the dollar Thursday—a byproduct of the central bank’s tight control over the currency. Also at play, a possible surge of quarter-end payments for Russia’s commodity exports.
The quick rebound of the ruble surprised some who expected that Western sanctions targeting Russia’s financial system would cause prolonged weakness in the currency. On the eve of Russia’s invasion of Ukraine, the ruble traded at 81 to the dollar. By early March, it tumbled past 150 before strengthening in recent days. One dollar bought 82 rubles in international trading Thursday and 83 rubles in Russian domestic markets…
Western sanctions capped the Russian central bank’s ability to sell its reserves denominated in dollars and euros to support the ruble’s value. But carve-outs in the sanctions allow Europe to continue buying Russian energy and ensured dollars and euros continue to flow. Russia ordered its exporters, such as oil and gas companies, to sell 80% of their foreign-currency revenues and buy rubles, helping the currency appreciate.
Russia ordered its exporters, such as oil and gas companies, to sell 80% of their foreign-currency revenues and buy rubles, helping the currency appreciate.
DB2
Again time is a very interesting thing. Obviously Russia can not keep selling 80% of their foreign currency revenues and buy rubles over and over again. The reason other Russian industries and trade are being cut off. This is going to whittle down. With that the Russians wont be able to pay for their war. Yes this will take time. As the Russians can not pay the military the central bank will print and devalue the currency.
That is Putin’s double talk and a bunch of misinformation. Russia will accept euros as payments into a Russian Bank and then the Russian bank changes the euros into rubles to pay Gazprom. So that Putin can claim that Gazprom was paid with rubles.
Russia ordered its exporters, such as oil and gas companies, to sell 80% of their foreign-currency revenues and buy rubles, helping the currency appreciate. — Obviously Russia can not keep selling 80% of their foreign currency revenues and buy rubles over and over again.
I read the article to mean that after the Russian companies sell their products they then have to convert 80% of the proceeds to rubles. That can continue as long as sales continue.
“But carve-outs in the sanctions allow Europe to continue buying Russian energy and ensured dollars and euros continue to flow.”
True, and yet the ruble is basically back where it was pre-war.
DB2,
The Russian internal market is completely manipulated…for as long as it can hold out.
The problem really gets bad when the military expects to be paid. Turn on the printing press and even the central bank can not manipulate the ruble as it wants.
True, and yet the ruble is basically back where it was pre-war. — The Russian internal market is completely manipulated…
But the Forex market is international and global. If there were some mismatch then traders, say, in Japan or Singapore or London could take advantage of the difference.
But the Forex market is international and global. If there were some mismatch then traders, say, in Japan or Singapore or London could take advantage of the difference.
DB2,
That may be happening. Russia’s central bank has an official rate according to an article I read earlier today. That rate is 82 mean while the forex was at 83 ruble/USD.
For the life of me I can not find that particular article. I have found mention of the official central bank rate, but not that rate itself being mentioned, in a WaPo article.
On the eve of Russia’s invasion of Ukraine, the ruble traded at 81 to the dollar. By early March, it tumbled past 150 before strengthening in recent days. One dollar bought 82 rubles in international trading Thursday…
That was at the end of March. Currently the rate 78 to the dollar, and that is with a stronger dollar (DXY is up 4% since before the war).
On the eve of Russia’s invasion of Ukraine, the ruble traded at 81 to the dollar. By early March, it tumbled past 150 before strengthening in recent days. One dollar bought 82 rubles in international trading Thursday…
That was at the end of March. Today it is trading at 62 rubles to the (now stronger) dollar.
Putin tells Europe: Pay in roubles or we’ll cut off your gas — The EU has agreed under no circumstances will they pay in rubles.
Germany And Italy Approved Russian Gas Payments After Nod From Brussels www.shorenewsnetwork.com/2022/05/20/germany-and-italy-approv…
Germany and Italy told companies they could open rouble accounts to keep buying Russian gas without breaching sanctions against Moscow following discussions with the European Union, sources said…
Poland, Bulgaria and Finland have refused to comply with Moscow’s demand that importers pay for gas via rouble accounts with Gazprombank and their supplies have been cut. Other member states, however, have been unwilling to steer companies towards action…
Katja Yafimava, senior research fellow at the Oxford Institute for Energy Studies, said there was no legal basis to suggest that opening a rouble account violated sanctions. “There is nothing in the written guidance that prevents buyers from opening such accounts. While the European Commission verbal statements have created ambiguity, it is the written guidance that matters,” she said.