Jakarta, CNBC Indonesia – The movement of the Russian ruble has taken the financial markets by surprise. How not, less than two months the ruble turned from the weakest currency to the best in the world.
The ruble became one of the few currencies that was able to bulldoze the United States (US) dollar, and was in the top position. Its strengthening throughout this year until Friday (20/5/2022) was more than 20%.
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Russia’s war with Ukraine made the country led by Vladimir Putin given a lot of sanctions by the United States and its allies. Starting from the financial sector to energy, from corporations to individuals.
From the financial sector, at least 7 Russian banks and institutions were excluded from the international banking information network known as SWIFT (Society for Worldwide Interbank Financial Telecommunication). platform social network for banks.
In addition to severing SWIFT from Russia, the United States and the Allies will also freeze the foreign exchange reserves of the Russian central bank placed abroad.
Russia’s foreign exchange reserves are currently US$643 billion, most of which is placed in the central banks of the US, Europe and China with an estimated US$492 billion. Forbes.
The asset freeze prevented Russia’s central bank from using its foreign exchange reserves to stabilize the ruble exchange rate. As a result, the ruble exchange rate plummeted to touch RUB 150/US$ on March 7, which is the weakest record in history. Compared to the position at the end of 2021 to that record, the ruble has fallen by more than 101%.
But in the past, several quick measures taken by Russia’s central bank (Central Bank of Russia/CBR) and the Kremlin government made the ruble rebound and become the best in the world, far behind the Brazilian real, which strengthened by 13%, according to Refinitiv data.
Last Friday, the ruble ended trading at RUB 59.5/US$, which was the strongest level since April 2018.
NEXT PAGE >>> This Is How Russia Strengthens the Ruble, Can RI Emulate?
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