Ruble Down by Over 18% in 2023
The Russian currency, the ruble, has stabilized and is expected to strengthen due to rising oil prices. The June current account deficit and G7 countries’ failure to reduce the oil price cap are factors that could benefit the ruble. The ruble has depreciated by over 18% since the beginning of the year, fueling inflation in Russia.
- Russian ruble is stabilizing and expected to be bolstered by rising oil prices.
- Ruble has depreciated by over 18% since the start of 2023, leading to inflation.
- G7 countries’ failure to reduce the oil price cap could give the ruble a boost.
- Some experts attribute the ruble’s previous rise to surging energy prices.
- Further restrictions on Russia’s ability to counter sanctions via oil revenues are urged.
Russian Oil Producers Defy Sanctions
The drop in prices of Urals crude, Russia’s main grade of oil, is attributed to decreased demand and the price cap. Calls for further reduction of the price cap have been made, but the G7 countries have ignored them. Surging demand from countries like India and China and oil output cuts by OPEC have contributed to the breach of the price cap. Despite this, Western officials insist that the price cap is effective in limiting Russia’s revenue.
Hot Take: The stabilization of the ruble and the potential boost from rising oil prices could have positive implications for Russia’s economy. However, the depreciation of the ruble and inflation remain significant challenges. The effectiveness of the G7’s price cap in restraining Russia’s revenue is also being questioned. Overall, the situation highlights the complex dynamics between oil prices, currency stability, and geopolitical factors.
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