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25 May, 2022 12:58

Ruble sets new record against dollar and euro

The currency has grown stronger despite loosened capital controls
Ruble sets new record against dollar and euro

The Russian ruble set another multi-year high against both the US dollar and euro on Wednesday, even as the central bank loosens capital controls.

The ruble was trading below 58 to the euro, its strongest level since May 2015, and below 56 against the dollar, its strongest since February 2018. The quotes are according to Moscow Exchange data as of 07:15 GMT. The Russian currency gave up some of the gains later in the session.

The ruble continued to strengthen on Wednesday even as the central bank loosens the capital controls initiated in March to protect it from Western sanctions.

On Monday, ahead of this week’s tax payment deadlines for exporters, the Russian regulator relaxed its requirements for the mandatory sale of hard currency earnings. Exporters now must sell just 50% of their proceeds, down from the previous 80%. These sales were seen as one of the main factors behind the strengthening of the currency. Additionally, the central bank is expected to further lower its key interest rate at an extraordinary policy meeting on Thursday.

The currency received a boost this week as more European companies appeared to be complying with Moscow’s demand that natural gas imports be paid for in rubles.

Experts note that capital controls, collapsing imports and surging energy prices have made the Russian currency about 25% stronger than before the Ukraine-related sanctions.

Bloomberg recently named the ruble the world’s best performing currency this year. However, some Western analysts have claimed that the capital controls imposed by the central bank are keeping the ruble’s official exchange artificially high.

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