Last week the Russian ruble hit a seven-year high against the U.S. dollar and while analysts have downplayed the rise, one economist said people should not “ignore the exchange rate.” American economists have been perplexed about the ruble’s market performance and Russian officials have been quoted as saying that a strong ruble “makes Russian exports more expensive.” Furthermore, U.S. president Joe Biden continues to blame high gas prices on Vladimir Putin.
Vladimir Putin Says the West’s Sanctions Obviously ‘Did Not Succeed’
Against the U.S. dollar, the Russian ruble has been performing at the strongest level since May 2015 and it has been said by a number of people that Western sanctions have failed. At the annual St. Petersburg International Economic Forum, Russian president Vladimir Putin said attempts to destroy the Russian economy did not come to fruition. “The idea was clear: crush the Russian economy violently,” Putin declared. “They did not succeed. Obviously, that didn’t happen.” Traditionally, when a country is sanctioned broadly by a majority of countries, capital leaves the region and the currency’s overall value against other fiat currencies would decline.
However, Russia is the second-largest exporter of oil and commands the top position as the world’s biggest gas exporter as well. America and the European Union (EU) are trying awfully hard to sanction Russia but the EU is forced to purchase gas and oil from the country in not-so-obvious ways. Fortune India claims that India is ostensibly buying oil from the Russian Federation and selling it back to the EU for a profit. The New York Post details that analysts believe the ruble’s strong performance is due to the Kremlin’s capital controls and the fact that oil and gas prices have skyrocketed worldwide.
