The Russian ruble continues to feel the pressure of global economic factors, hitting a 16-month low against major currencies early on Monday.
It was reported that the Russian currency was trading at over 96 rubles to the U.S. dollar, a rate unseen since March 28, 2022, according to early morning GMT data, Russia’s RT News reports.
Although there was a minor recovery against the euro after a similar slump to a 16-month low of 106 on Friday, the overall trend points to a weakened ruble.
Analysts have cited several factors behind the ruble’s softening, including increased local demand for foreign currency that coincides with the summer holiday season, and reduced backing from exporters at the start of the month.
Egor Gilnikov, the chief analyst at Promsvyazbank, highlighted the role of the Finance Ministry’s latest move in putting additional downward pressure on the ruble.
The ministry has switched from selling to buying foreign currency as of August 7, as per the stipulations of the budget rule.
Moreover, Gilnikov pointed to an unexpected adjustment in the Moscow Exchange index, stating that this event significantly impacted the ruble.
The possibility of capital outflows from the nation also adds to the complexities affecting the currency’s value.
Last week, Russia’s Finance Minister Anton Siluanov revealed that the alteration in the country’s trade balance and a high demand for foreign currency during the holiday season are the principal causes behind the ruble’s devaluation, RT notes.
The recent shifts in the Russian currency underscore the nation’s economic challenges and fluctuating trade relations.
