2022 the year of Russian economy turn to the East
2022 has become a test of Russia’s strength in many fields, and the economy was no exception.
Although Russia has been living under sanctions for more than a year, its pressure reached unprecedented proportions in 2022.
However, at the end of this year, it can be said that Western countries have failed to destroy the Russian economy.
It’s remarkable in 2022 that the Russian ruble strengthened its position, as the dollar traded below the level of 52 rubles, after it was last March above the level of 100 rubles.
After Russia launched a special military operation in Ukraine, the Russian ruble declined significantly, in light of speculators manipulating the psychological factor and betting on the fall of the ruble.
Against this background, the Russian authorities rushed to implement a set of measures to support the Russian currency, including obligating Russian exporters to sell 80% of export sales, which contributed to achieving a balance between the supply and demand for foreign currencies in the Russian market and relieving pressure on the ruble.
In early July, the dollar exchange rate reached only 51 rubles, and the euro was below the level of 54 rubles, after the exchange rate on March 12 was at the highest levels, at 120.37 rubles per dollar and 132.95 rubles per Euro.
As a result, Russians reconsidered their priorities of foreign currencies, and according to a report by the Russian Central Bank, individuals in Russia bought Chinese yuan for nearly 140 billion rubles, while purchases of dollars and Euros reached the level of 230 billion rubles.
The demand in Russia for the US dollar and the Euro witnessed fluctuations in the year 2022, and the Russians believe that the Chinese currency is the only currency that can become a substitute for foreign banknotes.
The rise of the ruble against the US dollar and the Euro, as well as the vague prospects for the shares of a number of local and foreign companies, prompted citizens to alternative types of investment, and talk is about investing in precious metals.
It should be noted that the Russian state itself stimulated the demand for this type of investment by simplifying the transactions of buying and selling the precious metal, as it abolished the value-added tax of 20% for citizens when buying and selling gold.
The issue of oil and gas has become more discussed throughout the year 2022.
After the launch of the military operation, Germany abandoned the Nord Stream 2 (two pipelines to pump gas from Russia to Germany through the bottom of the Baltic).
In response to Western pressure, Russia has converted payments for Russian gas exported to Europe into Russian rubles, which has supported the Russian currency and kept foreign currency flowing into the country.
The Russian move caused a state of hysteria in Europe and the G7 countries, as the West continued to impose sanctions on Russian entities and freeze foreign currency accounts and foreign property of Russian companies.
As for the former US ambassador to Russia, Michael McFaul, he went further, saying that Russia should continue to supply energy resources, but buyers shouldn’t pay for these supplies until the military operation stops.
But in the end, the consuming countries in Europe accepted the new reality (paying for supplies in rubles) and energy companies from Austria, Germany, France, Hungary, Italy, Slovakia and North Macedonia announced their decision to continue buying Russian gas.
However, some countries still reject the move, including the Netherlands, Finland, Denmark, the United Kingdom and the Baltic states (Lithuania, Latvia and Estonia).
Since then, Russian gas supplies to these countries have stopped.
With regard to the supply of Russian gas through the Nord Stream 1, the path was subjected to an explosion on the 26th of last September, and the accident occurred in the territorial waters of Denmark, and the causes of the explosions haven’t been announced yet, but Russian experts don’t participate in the investigation and without their participation, Moscow won’t accept any Results about what happened.
Before the explosions, the Nord Stream 1 faced technical obstacles related to restoring a gas turbine after its maintenance in the West.
Meanwhile, Central Europe has shifted to buying gas from Norway and LNG from the United States, while Russia has begun to increase supplies and cooperate more closely with China.
Now of all the gas routes from Russia to Europe, the Turk Stream is operating at full capacity and the gas is partly supplied through Ukraine to Europe.
The year 2022 was also marked by the exit of a number of brands from Russia from a variety of fields: from newborn baby goods to construction equipment, and among the brands that left Russia were “IKEA”, “Coca-Cola” and “McDonald’s”, while some companies such as “Renault” decided to transfer its business to Russian entities for symbolic sums, leaving themselves the opportunity to buy it back in a few years.
Despite leaving companies, opinion polls showed that only 6.7% of Russians suffered from that withdrawal.