Every cloud? Trade minister Manturov says major collapse in value of ruble this year has been ‘awesome’ for Russian business

With the value of his currency down over 20 percent since January, you'd have thought Russia's trade minister would be worried. On the contrary, Denis Manturov has called it “awesome,” lauding its benefits for many businesses.

Speaking to Bloomberg, on this week, Manturov explained that companies that don’t rely on imports from abroad “are in a sweet spot right now.”

The Minister isn’t the only one to have highlighted the power of a falling currency. In March, analysts said the weakening of exchange rate values was beneficial to Russian exporters, such as in the grain and metal industries. That same month, the Ruble came the world’s worst-performing currency against the dollar. 

At the start of the year, the dollar was trading at around 61.7 rubles – a figure that’s now risen to 78.1. In greenback terms, that means any savings in rubles have depreciated by around 26 percent, making it much more expensive for Russians to travel abroad to most places.

On the plus side, with a weaker ruble, it is much cheaper for foreign countries to buy Russian goods, and some businesses may see their exports rise.

This year, the ruble has become one of the worst currencies in emerging markets, due to falling global oil prices and fears of new US and EU sanctions. In recent weeks, that fear has been exacerbated, following the alleged poisoning of Russian opposition figure Alexey Navalny, and US poll results showing the increased probability of a Joe Biden victory in the 2020 presidential election.

READ MORE: Russian ruble will recover despite current volatility, Kremlin says

Earlier this week, the International Monetary Fund (IMF) improved Russia’s economic forecast. In June, mainly due to Covid-19, the IMF predicted that the economy would contract by 6.6 percent – a figure it has now improved to 4.1 percent. Despite growth being below zero, Russia is actually projected to do better than the world as a whole, with the IMF predicting a 4.4 percent contraction. 

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