Russia's ruble hits weakest point since 2022

Russia’s Central Bank set the ruble’s official exchange rate at over 105 against the U.S. dollar on Wednesday, marking its lowest value since the beginning of 2022.

The ruble's decline comes as new sanctions target Gazprombank, heightened tensions with the West persist, and a Kremlin policy seems to support a weaker currency, News.Az reports, citing The Moscow Times.

Finance Minister Anton Siluanov defended the ruble's devaluation, calling it “very, very favorable” for Russian exporters. A weaker ruble helps Russia finance its war in Ukraine more effectively by reducing the real costs of arms and military salaries.

Russia’s Central Bank pegged the ruble at 110.49 against the euro on Wednesday, continuing its downward trend. Since June, official exchange rates have been determined by over-the-counter transactions between major exporters and commercial banks, following U.S. sanctions that led to the suspension of Moscow Exchange trading in dollars and euros.

The ruble’s weakening poses a threat to the purchasing power of Russian citizens, as it drives up the cost of imported goods. The currency had previously hit a historic low of 150 per dollar shortly after the February 2022 invasion of Ukraine, but it recovered later that year, aided by stringent capital controls imposed by the Central Bank.

News.Az