The Russian currency witnessed strong declines this week, recording its lowest level since May 2022.
The Russian ruble deepened its losses after the introduction of the decision to put a ceiling on the price of Russian oil transported by sea, which was approved by the Group of Seven and the European Union, in addition to the great pressures posed by the European Union’s decision to put a ceiling on the price of gas sold in the countries of the Union, which will enter into force in mid-February 2023.
The Russian ruble fell against the dollar by 15% since the beginning of this December, to record about 72 rubles per dollar in the past hours.
All of this raised questions about whether the Russian currency had begun to lose its ability to withstand pressure, a few days after the Russian president said that the ruble was one of the strongest currencies in the world in 2022.
Economic experts explained that the gains achieved by the Russian currency in the past were supported by the decision imposed by Russia on unfriendly countries to pay the price of Russian supplies of oil and gas in rubles.
About 550 million Euros were entered daily into the Moscow Stock Exchange with the aim of converting them into rubles, and this contributed to the high demand for the Russian currency.
The loss of the ruble’s resilience is a natural matter now, as the decline in Europe’s dependence on Russian energy caused a decrease of approximately 50% from the amount of 550 million Euros that Russia was achieving daily, in addition to the negative impact created by the decision to put a ceiling the price of Russian oil transported by sea, and the decision to set a ceiling for the price of gas sold in Europe.
According to experts, the price value of the Russian ruble will be subject to vibration whenever Europe dispenses with its need for Russian oil and gas, as the issue of linking the ruble to oil and gas revenues has become a negative factor on the Russian currency.
In conclusion, the Russian ruble cannot be considered one of the strongest currencies in the world, given the fact of its lack of ability to maintain stable.
The Russian currency began to weaken 4 weeks ago, not only because of the pricing limit that was imposed on the Russian oil, but also as a result of other things, including the interventions of the Russian Central Bank, in terms of reducing interest rates, after noticing it.
The strength of the Russian ruble negatively affected the economy, especially the movement and revenues of Russian exports.
The Russian Central Bank was planning to gradually weaken the ruble to protect the Russian economy, indicating that the foundations on which the Central Bank relied since the beginning of imposing sanctions on the country’s economy following the war with Ukraine, are no longer valid for the year 2023, and this is what necessitates making adjustments to its strategy for the next year.