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Russian Rouble Continues Downward Spiral

by Carl Steward
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Russian Rouble Continues Downward SpiralRussian Rouble Continues Downward Spiral

Russia’s currency, the rouble, has been sliding downwards ever since the country announced its invasion of Ukraine. The sanctions from a lot of western countries are taking their toll, devaluing the currency rapidly. The impact is so severe that some Russian banks, like Sberbank, have numerous failing subsidiaries. Furthermore, there’s been a bit of a bank rush in the country, as people worry about losing access to their funds.

More of the same seems to be incoming, as numerous agencies, such as Moody’s and Fitch, downgraded the country’s status. The impact of the sanctions forced the downgrade, as Russia’s financial situation is up in the air. That has caused the rouble to slide even further compared both to the euro and US dollar. USD/RUB is currently at 109.65, and EUR/RUB is at 125.5. Since Russia has announced its military action against Ukraine, the rouble has slid over 20% against the dollar.

And while that is a significant slide, it follows an equally as unfortunate performance of the rouble. During the past few years, the currency has been either in a state of decline or chaos, never stabilizing and recovering. As the conflict continues, the likelihood is that the rouble will fall even lower as time goes on.

The Moscow Stock Exchange also remains closed for traders as the situation stalls. With the introduction of a new sanction, preventing any transactions with the Bank of Russia, things are likely about to get even more severe. Furthermore, experts predict that the transaction embargo might be the most hard-hitting sanction so far. S&P 500 also downgraded Russia’s status last week to mark it as sub-investment grade.

Despite Russia’s effort to become sanction-resistant, there’s no doubt about the effectiveness of the current measures. With many outlets predicting a double-digit shrink for the country, Russia’s financial future is questionable.

The post Russian Rouble Continues Downward Spiral appeared first on forexinsider24.com.

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