The Russian ruble has lost as much as another 22 percent of its value, as more financial sanctions have been applied to Russia — including restrictions on access for some banks in Russia to the Society for Worldwide Interbank Financial Telecommunication global bank payments system — by a number of countries as part of the response to the invasion of Ukraine by military forces since Thursday, February 24, 2022.
Russian Ruble Devalues By Another 22 Percent
The exchange rate at the time this article was written was that one Russian ruble was equivalent to 0.00769279 United States dollars — which is a drop of greater than 22.14 percent from when the Russian ruble was worth less than one cent at 0.0098858951 United States dollars on Monday, February 28, 2022 — or that one United States dollar was equivalent to 129.9992 Russian rubles.
At one point yesterday, Monday, March 7, 2022, the ruble sunk to as low as 0.00675965 United States dollars; so it actually rebounded today by greater than 13.8 percent from its all-time record low value.
The sanctions are designed to restrict the central bank of Russia from access to greater than $600 billion in reserve funds, which adversely affects its ability to support the ruble…
…and the record decline of the ruble to its lowest level ever could lead to a substantially higher rate of inflation and significantly disrupt the economy in Russia, which would affect all citizens of the country and not solely elite members of Russian society who were the intended targets of earlier sanctions.
In response to the declining ruble, the key interest rate recently more than doubled — from 9.5 percent to 20 percent — by the central bank of Russia in order to offset the increased risk of depreciation and inflation of the ruble. Also, 733 billion rubles — or approximately $8.78 billion in United States dollars — in local bank reserves would be freed to boost liquidity.
Final Boarding Call
Until the military invasion of Ukraine by Russia ends, the ruble will most likely continue to be pressured by sanctions and boycotts which have been imposed by other countries worldwide — as well as the pausing of sales and manufacturing by multinational companies — and the sanctions could get even more restrictive before they are eventually eased…
Photograph ©2020 by Brian Cohen.
