Al Jazeera/Bloomberg: Ruble surges as Russia considers looser capital controls
The ruble’s rebound has left it more than 30 percent stronger against the dollar than it was before Russia invaded Ukraine.
The ruble’s blistering rebound picked up pace on Monday, ratcheting up pressure on Russia to ease a key capital-flow control that’s underpinned the currency’s recovery.
With the gains now threatening to hurt budget revenue and exporters, a decision to cut the share of hard-currency earnings that exporters convert into rubles could come as early as this week, according to two people familiar with the matter.
The mandated proportion could be reduced to 50% from 80% currently, the people said, who requested anonymity because the details of the plan aren’t public.
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Update #1: Russian rouble leaps to near 7-year high vs euro (Reuters)
Update #2: How Russia made its ruble the world’s top-performing currency (Quartz)
WNU Editor: My friends/family/and contacts in Russia are telling me that the worse of the economic crisis has passed. That prices have stabilized and there are no shortages in the stores. Many foreign firms have left, but everyone is telling me that the economy has adjusted, and Western goods that are blacklisted are still entering the country from other countries like China.
I am also reading reports that the Russian Central Bank is buying foreign currencies to halt the rise of the Russian ruble. I do not know who is buying rubles (my gut tells me that it is China), but it is a clear violation of Western sanctions.
Bottom line.
The upward trajectory of the Russian ruble was certainly not expected, and worse, the perception now is that Europe is facing dire economic consequences because of it. And while Ukraine President Zelensky is calling for more sanctions, I think some European leaders are beginning to understand that these measures are not working.
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