Recent news reports have detailed that Russia’s fiat currency, the ruble, was the best-performing currency worldwide, and articles reported that US economists were surprised by the trend. On Monday, the Russian ruble rose to 55.47 per dollar, the highest increase since 2015. While many have dismissed the ruble’s exchange rate, Charles Litchfield, deputy director of the Atlantic Council’s Geoeconomics Center, published an editorial titled “Don’t Ignore” Exchange Rates: How a Strong Ruble Could Shield Russia.
Russia’s ruble climbs higher – report says ‘Putin has the last laugh’
Financial sanctions against Russia are not affecting the transcontinental country as much as Western media has shown over the past few months. On Monday, the Russian ruble tapped a higher price against the US dollar and was the highest increase since 2015. There have been several reports from economists and analysts who have said that Russia’s financial books are ripe and that most of the ruble’s strength is just smoke and mirrors a Youtuber’s claim that while the ruble looks strong, most of the strength is strengthened by manipulation.
Youtuber Jake Bro told his 146,000 subscribers that “the Russian economy is currently tanking, inflation is high, unemployment is rising, wages are falling, the GDP of the Russian economy is falling.” However, Bro’s arguments could also be said of the United States as the US economy is headed for a recession, inflation is at its highest in 40 years, unemployment claims soar in the US due to low productivity, and the US economy. GDP has shrunk. significantly in Q1 2022.
Bro says the Russian government and central bank are manipulating things, which has strengthened the ruble. Yet, arguably, US politicians and the Federal Reserve can also be accused of manipulation and spreading unreliable information. Other reports that do not take advantage of Bro’s biases indicate that sanctions against Russia have failed miserably. A report published by Armstrong Economics.com said the Russian oil boycott is not working and that “Putin is having the last laugh because he is now selling more oil at a higher price point.”
Martin Armstrong, author of Armstrong Economics.com, said:
In April, Russian oil exports increased by 620,000 b/d to 8.1 million b/d. India (+730,000 b/d) and Turkey (+180,000 b/d) helped offset the international embargo, while the EU remained the largest importer despite a sharp reduction in shipments. The IEA reported that Russian oil exports grew by more than 50% during the first four months of the year – the boycott has completely backfired on the West and helped bolster the Russian economy.
Report shows India buys oil from Russia, refines it, then sells it to Europe for profit – EU commission president predicts oil sanctions
Additionally, Russia has been keeping its financial dealings unclear as the country announced monthly figures on government spending would no longer be disclosed. Russia’s finance ministry told the press that the country needed to “minimize the risk of imposing additional sanctions”. Bitcoin.com News reported two weeks ago that many countries are not complying with Western sanctions and are buying oil from the Russian Federation. For example, India is reportedly getting oil from Russia and after the oil is refined, the country is selling it to Europe for profit.
New Delhi: India is importing crude oil from Russia and re-exporting it to the US, France, Italy and the UK at exorbitant prices. – Shows CREA report.
— South Asia Index (@SouthAsiaIndex) 14 June 2022
China is also buying oil from Russia, and many oil refineries are forced to buy oil from the transcontinental country. For example, ISAB, Italy’s largest refinery, has been forced to source crude oil from Russia because banks have stopped giving credit to the company. China is the largest single buyer of Russian oil and has been since 2021, and data shows the country receives an average of 1.6 million barrels per day from Russia. Meanwhile, oil shortages in Europe are looming as warnings say Britain could face a massive grid blackout. Financial newspaper The Economist insists that Europe is suffering from “a severe energy-price shock”.
Those citing the size of Russia’s GDP fail to grasp the inconvenient truth:
If we subtract Russian energy from the mix of global energy supplies, global oil and gas prices will rapidly rise to levels that collapse the entire global economy, and the USD-focused debt market and financial system. pic.twitter.com/dZiEaZXh3H
— Luke Gromen (@LukeGromen) February 21, 2022
In addition, two weeks ago, Charles Litchfield, deputy director of the Atlantic Council’s Geoeconomics Center, published an editorial saying that people should not dismiss the ruble exchange rate. Litchfield’s article noted that Western governments claimed that, eventually, Russia’s economy would eventually fail, but they felt that things needed to be reevaluated. “The Russian financial system may have suffered an initial setback – but declining gross domestic product (GDP) and a lack of crippling inputs, he claimed, would eventually force Moscow to de-escalate as the war begins a grinding phase. enters – but it is time to reevaluate this stance,” wrote Litchfield.
The economy of Russia would fail as a result of their “war”. They will not be in a bargaining position any time soon…. Just take out their diplomats. https://t.co/Yx2Bn4ACaa
– Jay Burgess – I am what I am. (@gooddem4ever) 5 April 2022
Government officials had predicted that the energy ban could backfire and would not necessarily work. During an interview in May, EU Commission President Ursula von der Leyen described how energy restrictions could backfire. Von der Leyen said that if countries “immediately” approve Russian oil imports, Vladimir Putin “would be able to move the oil he does not sell to the EU on the world market, where prices would rise, and [he will] Sell it for more.”
What do you think about the Russian ruble market performance and theories as to why it is doing so well? Do you think the Russian ruble is being prepared by the country’s authorities or do you think the fiat currency is strong? Let us know what you think about this topic in the comment section below.
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