Currencies

Donald Trump says Russia’s currency at a ‘historic high’ due to surge in fuel prices

Former US President Donald Trump has said that the strengthening of Russia’s currency, the ruble, to a historic high is due to surging oil prices. Russia has eased the key capital control that has led to the Russian ruble’s recovery. The former US President said that the skyrocketing prices of oil and Moscow’s transition to payments for energy in its own currency have allowed Russia to earn “a fortune.” 

Russian President Vladimir Putin’s military operation in Ukraine could have oil prices hit the $30-40 per barrel mark, Trump said in a televised interview. Russia earns approximately $20 billion a month from energy exports and since it announced for “unfriendly countries” to make payments in rubles, some foreign buyers have complied with the request. This, in turn, has helped the ruble in becoming the best performing currency. Putin has controlled the exports due to the Western embargo and sanctions that have compensated for the increase in prices of raw materials.

Russia reduces foreign-exchange proceeds to 50% from 80%

As of May 29, the ruble has become one of the strongest currencies in the world. The share of foreign-exchange proceeds that exporters are required to sell is being reduced to 50% from 80%, Russia’s Finance Ministry said in a statement. It further stressed on the “stabilisation of the exchange rate and the reaching of adequate levels of foreign-currency liquidity on the domestic market.” The ruble is currently rallying 30% stronger against the dollar. Russia’s currency appreciation is reaching “a peak,” the country’s economy minister said, adding that the future rate cuts will take further pressure off the currency. 

Putin had earlier asserted that despite the sanctions coordinated by the West against his country, Russian economy “will remain open” in the new conditions. At a meeting of the Russian Duma officials and his finance ministers, Putin reiterated that Moscow will “expand cooperation with those countries that are interested in mutually beneficial partnership,” referring to the East Asian allies.

He insisted that a “whole range of issues is important here” including cutting the reliance on US dollar for trade and building alternative payment methods with Russia’s own domestic currency– the ruble. Putin emphasised that the strategic significance of such arrangements “has increased significantly” in the recent months as Moscow vouches to “completely remove” US Dollar assets from its National Wealth Fund.

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