ruble rate. The Russian currency is the strongest in seven years

The Russian currency rose to 55 against the US dollar, which Strongest level since July 2015 The ruble is not weakening even after policymakers cut the benchmark rate by 1,050 basis points and eased capital controls imposed in response to Western sanctions, Bloomberg reports.

Government officials have described this thinking as evidence that Russia has escaped international sanctions for its invasion of UkraineBut they are increasingly concerned that a strong currency will undermine the country’s export competitiveness and budget finances.

Senior government and central bank officials were unveiled on Monday Conflicting opinions on the target price of the ruble. First Deputy Prime Minister Andrei Belousov said that the authorities discussed the goal of the ruble and the priority of economic growth. He said the “optimal” level is between 70 and 80 rubles per dollar. Hours after Belousov’s comments surfaced, a senior central bank official warned against such a policy change, according to a Bloomberg report.

According to analysts cited by the agency, the authorities lack the means to influence the Russian currency, even if they wanted to. Allowing foreigners to sell assets could weaken the ruble, but that would be politically impossible, according to Dmitriy Polevoy, an economist at Locko Bank JSC.

ruble rate

The war initially severely weakened the ruble, with the currency reaching a record low of 121 per dollar March 10, as the United States and Europe sought to isolate the country from the international financial system.

In response to Western sanctions, the authorities imposed capital controls. While this helped Russia avoid a currency crisis, it has become a central bank concern because a strong currency restricts export earnings in the local currency and makes Russian goods more expensive abroad.