How much is one Russian ruble worth?
The Russian ruble fell on Monday to its lowest level since March 2022, immediately after President Vladimir V. Putin launched Moscow’s all-out invasion of Ukraine.
Amid growing concerns about the weakening currency, the Russian central bank said it would hold an emergency meeting Tuesday morning “to discuss the key rate level.” The bank, which three weeks ago raised its benchmark interest rate by a full percentage point, to 8.5 percent, has signaled in recent days that it is willing to raise rates further to curb inflation. .
The bank’s announcement seems to slow down the ruble’s devaluation. After weakening to around 102 to the dollar, it gained strength and crossed below 100 in a volatile trade.
The ruble’s value has fallen about 25 percent against the dollar since the beginning of the year. Its decline led to fears of rising inflation, and prompted Kremlin cheerleaders to criticize the country’s monetary authorities in the state news media.
Maksim S. Oreshkin, an economic adviser to Mr. Putin, wrote in opinion column for Russia’s state news agency Tass on Monday that the “main source of the weakening of the ruble and acceleration of inflation is loose monetary policy,” and that Russia’s central bank has “all the necessary tools to normalize the situation in the near future.”
“A weak ruble complicates the restructuring of the economy and negatively affects the real incomes of the population,” he wrote. “A strong ruble is in the interest of the Russian economy.”
Last week, Vladimir Solovyov, a Kremlin-winning Russian television commentator, said the ruble’s devaluation was a subject of international ridicule.
On Thursday, in a move to strengthen the ruble, Russia’s central bank said it would stop buying foreign currency for the rest of the year.
On Monday morning, a statement followed in Interfax saying it “accepts the possibility of raising the key rate in future meetings.” By late afternoon, after the ruble continued to weaken, the announcement of a meeting on Tuesday morning came, a month before the bank’s next scheduled rate-setting meeting on September 15.
Russia’s annual inflation rate reached 4.3 percent in July, and the central bank forecasts it could rise to as high as 6 percent by the end of the year.
Concerns over the ruble and inflation are the latest storm of financial volatility unleashed by Mr. Putin’s war on Ukraine. The government’s widening budget deficit also raises concerns about maintaining Russia’s heavy spending on war.
Despite these challenges, Russia’s economy grew 4.9 percent in the April-to-June period compared with a year earlier, the government said Friday, a better-than-expected result and the first annual gain. of the country’s economic growth since the beginning of the war in Ukraine.
In July, the International Monetary Fund was raised forecast it for Russian economic growth in 2023 to 1.5 percent, from 0.7 percent. In 2022, the country’s gross domestic product will shrink by 2.1 percent. Russia’s growth was largely driven by state spending on the war effort, which fueled inflation and caused budget deficits.
After invading Ukraine in February 2022, Russia has struggled to plug holes in its economy caused by an onslaught of Western sanctions and an outflow of capital and assets, while the ruble has fallen to as low as 135 per dollar. But rising oil prices and falling imports have helped the ruble recover and lead to a record trade surplus of $221 billion in 2022.
This year, the surplus has shrunk and oil revenues have fallen, due to a Western embargo and a price cap.
Oleg Matsnev contributed reporting.