Volatile Ruble Recovers Ground After Biggest Weekly Decline Since July

On Monday, a volatile session saw the Russian ruble record a sharp rise, as the currency managed to recover some of the ground it had lost in the biggest weekly slump it had recorded since early July.

This was primarily because of concerns about the impact of the sanctions that have been imposed on oil and gas that are directly related to export revenue of Russia.

Ruble declines and climbs

Last week, there was an 8% drop in the Russian ruble and it has dropped by 10% this month after a price cap and an oil embargo was put into effect.

According to the finance ministry, the recent decline occurred because imports were making a recovery.

The ruble had strengthened 2.8% against the US dollar by 0748 GMT to trade at 68.31. It also strengthened against the euro by 4.4% to reach 72.4.

Likewise, it rose against the Chinese yuan by 2.1% to reach 9.71. Market experts did note that trading activity was expected to be light on Monday.

They also said that the Russian ruble would strengthen in the ongoing month-end tax period because this is the time when Russian exporters typically convert their revenues into foreign exchange to pay off local liabilities.

Overall performance

Despite the up-and-down movements in the Russian currency recently, it is a fact that the ruble has been one of the top-performing major currencies in the world this year against the US dollar.

This was thanks to a reduction in imports due to sanctions as well as the capital controls the country had implemented.

However, it was not able to retain the top spot, as last week saw the Brazilian real surpass it.

Brent crude oil, which is considered a benchmark for the main export of Russia, reached a high of three weeks in its last trading session before the Christmas holiday weekend.

It rose 3.7%, which saw it reach a price of $84.0 per barrel.


It was not just the Russian ruble that strengthened on Monday, but Russian equities also rose on the day.

Since it is the final week of this year, it is highly likely that investors are going to be balancing their portfolios, which means that there is no predicting how the markets will turn out.

Market experts said that there was a possibility of them going either way. There was a 2.1% rise in the RTS index, which is dollar-denominated, as it reached 983.4 points.

As far as the MOEX Russian index is concerned, it is ruble-based and recorded gains of 0.3% to reach 2,130.6 points.

Meanwhile, the Bank of Russia also talked about the impact of the risk of inflation in the country in regard to monetary policy.

There is a possibility that the Russian central bank may decide to increase interest rates in the country in the coming year if it believes that there may be a big impact on inflation.