Significantly weaker in recent weeks, the ruble continues its downward trend, with the euro breaking the psychological threshold of 100 rubles for the first time since March 2022. The European currency reached 102 rubles, with a growth of more than 3% Compared to yesterday, the dollar reached 93.3 rubles, with a strengthening of more than 2.5%. The governor of the Central Bank of Russia, Elvira Nabiullina, quoted by the Ria Novosti agency, explained the weakening of the national currency with the sharp decline in Russia’s trade surplus. In this case, it would be an effect of Western countries’ embargo on Russia and the price cap on Russian oil imposed by the European Union. In fact, Russia is being forced to sell oil at a 25% discount to Brent, meaning budget revenues are significantly lower than expected. According to some calculations, government revenues have fallen by 47% year-to-date.

Broken Balances

In reality, according to many analysts, the collapse of the Russian currency was largely due to the attempted coup by the head of the mercenary militia Wagner Prigozhin. In the two weeks following the event, the ruble accelerated its decline and exited what was considered a physiological range of 80-90 against the dollar.

Dollar/Euro Exchange Rate: Partial recovery at close of trade

The current sharp fall in the value of the ruble could also be caused by speculative games, but the development of the exchange rate does not affect Russia’s economic stability, since the macroeconomic indicators are actually better than expected, said Kremlin spokesman Dmitry Peskov from the Interfax agency. “The ruble is falling, but we should keep in mind that we have seen this several times before and there have been some bounces,” Peskov added. The ruble also rallied on Thursday, June 6, falling below the 100 mark against the euro, down around 1% to 99.18.