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The Advertiser
12 hours ago
- Business
- The Advertiser
Why the rouble is one of the best performing currencies
The Russian rouble's 45 per cent rise against the US dollar since the start of the year has made it one of the world's best performing currencies - but the sharp appreciation is proving to be a double-edged sword for the heavily sanctioned Russian economy. WHY HAS THE ROUBLE RISEN SO MUCH AGAINST THE DOLLAR? The weakness of the US currency, whose index lost 6.6 per cent since President Donald Trump's "Liberation Day" tariff announcement on April 2, has helped the rouble Although the central bank says there is a freely floating exchange rate, it has been selling the Chinese yuan, its only major intervention tool, to support the rouble When the rouble strengthens against the yuan, its rate against the US dollar strengthens as well to avoid arbitrage HOW IS THE ROUBLE TRADED? Since sanctions hit the Moscow Stock Exchange (MOEX) in 2024, the rouble trades over-the-counter against the US dollar and euro Banks report their quotes to the central bank, which uses them to set the official rate The rouble is no longer a major internationally traded currency and many Western companies and banks have left Russia but the country remains a top oil and agriculture exporter and the world's 11th largest economy Russia's push to shift trade into non-Western currencies, especially the yuan, may have implications for the global dominance of the US dollar in the long-term WHY IS ROUBLE-YUAN THE BIGGEST PAIR? The yuan has overtaken the US dollar as Russia's most traded foreign currency Russia's total trade with China hit a record $US245 billion The rouble is up against the yuan by 25 per cent this year WHAT DOES THE RUSSIAN GOVERNMENT SAY ABOUT THE ROUBLE? The Russian government wants a weaker rouble to boost budget revenues If the rouble stays strong, analysts estimate the budget could lose 2.4 per cent of its revenues this year Exporters, from oil to metals to agriculture, are also hurting HOW DO ORDINARY RUSSIANS VALUE THE ROUBLE? The public still sees the US dollar as the benchmark, even though yuan use is rising Sanctions have made foreign travel and US dollar and euro international transfers harder, reducing demand for cash dollars WHAT LIES AHEAD FOR THE ROUBLE? A big test looms in early September, when a 50-day deadline set by US President Donald Trump for Russia to show progress toward peace in Ukraine expires If new US sanctions targeting buyers of Russian oil follow, the rouble could come under renewed pressure The last time the rouble weakened significantly was in November 2024, after Washington sanctioned Gazprombank, which had handled oil and gas payments The Russian rouble's 45 per cent rise against the US dollar since the start of the year has made it one of the world's best performing currencies - but the sharp appreciation is proving to be a double-edged sword for the heavily sanctioned Russian economy. WHY HAS THE ROUBLE RISEN SO MUCH AGAINST THE DOLLAR? The weakness of the US currency, whose index lost 6.6 per cent since President Donald Trump's "Liberation Day" tariff announcement on April 2, has helped the rouble Although the central bank says there is a freely floating exchange rate, it has been selling the Chinese yuan, its only major intervention tool, to support the rouble When the rouble strengthens against the yuan, its rate against the US dollar strengthens as well to avoid arbitrage HOW IS THE ROUBLE TRADED? Since sanctions hit the Moscow Stock Exchange (MOEX) in 2024, the rouble trades over-the-counter against the US dollar and euro Banks report their quotes to the central bank, which uses them to set the official rate The rouble is no longer a major internationally traded currency and many Western companies and banks have left Russia but the country remains a top oil and agriculture exporter and the world's 11th largest economy Russia's push to shift trade into non-Western currencies, especially the yuan, may have implications for the global dominance of the US dollar in the long-term WHY IS ROUBLE-YUAN THE BIGGEST PAIR? The yuan has overtaken the US dollar as Russia's most traded foreign currency Russia's total trade with China hit a record $US245 billion The rouble is up against the yuan by 25 per cent this year WHAT DOES THE RUSSIAN GOVERNMENT SAY ABOUT THE ROUBLE? The Russian government wants a weaker rouble to boost budget revenues If the rouble stays strong, analysts estimate the budget could lose 2.4 per cent of its revenues this year Exporters, from oil to metals to agriculture, are also hurting HOW DO ORDINARY RUSSIANS VALUE THE ROUBLE? The public still sees the US dollar as the benchmark, even though yuan use is rising Sanctions have made foreign travel and US dollar and euro international transfers harder, reducing demand for cash dollars WHAT LIES AHEAD FOR THE ROUBLE? A big test looms in early September, when a 50-day deadline set by US President Donald Trump for Russia to show progress toward peace in Ukraine expires If new US sanctions targeting buyers of Russian oil follow, the rouble could come under renewed pressure The last time the rouble weakened significantly was in November 2024, after Washington sanctioned Gazprombank, which had handled oil and gas payments The Russian rouble's 45 per cent rise against the US dollar since the start of the year has made it one of the world's best performing currencies - but the sharp appreciation is proving to be a double-edged sword for the heavily sanctioned Russian economy. WHY HAS THE ROUBLE RISEN SO MUCH AGAINST THE DOLLAR? The weakness of the US currency, whose index lost 6.6 per cent since President Donald Trump's "Liberation Day" tariff announcement on April 2, has helped the rouble Although the central bank says there is a freely floating exchange rate, it has been selling the Chinese yuan, its only major intervention tool, to support the rouble When the rouble strengthens against the yuan, its rate against the US dollar strengthens as well to avoid arbitrage HOW IS THE ROUBLE TRADED? Since sanctions hit the Moscow Stock Exchange (MOEX) in 2024, the rouble trades over-the-counter against the US dollar and euro Banks report their quotes to the central bank, which uses them to set the official rate The rouble is no longer a major internationally traded currency and many Western companies and banks have left Russia but the country remains a top oil and agriculture exporter and the world's 11th largest economy Russia's push to shift trade into non-Western currencies, especially the yuan, may have implications for the global dominance of the US dollar in the long-term WHY IS ROUBLE-YUAN THE BIGGEST PAIR? The yuan has overtaken the US dollar as Russia's most traded foreign currency Russia's total trade with China hit a record $US245 billion The rouble is up against the yuan by 25 per cent this year WHAT DOES THE RUSSIAN GOVERNMENT SAY ABOUT THE ROUBLE? The Russian government wants a weaker rouble to boost budget revenues If the rouble stays strong, analysts estimate the budget could lose 2.4 per cent of its revenues this year Exporters, from oil to metals to agriculture, are also hurting HOW DO ORDINARY RUSSIANS VALUE THE ROUBLE? The public still sees the US dollar as the benchmark, even though yuan use is rising Sanctions have made foreign travel and US dollar and euro international transfers harder, reducing demand for cash dollars WHAT LIES AHEAD FOR THE ROUBLE? A big test looms in early September, when a 50-day deadline set by US President Donald Trump for Russia to show progress toward peace in Ukraine expires If new US sanctions targeting buyers of Russian oil follow, the rouble could come under renewed pressure The last time the rouble weakened significantly was in November 2024, after Washington sanctioned Gazprombank, which had handled oil and gas payments The Russian rouble's 45 per cent rise against the US dollar since the start of the year has made it one of the world's best performing currencies - but the sharp appreciation is proving to be a double-edged sword for the heavily sanctioned Russian economy. WHY HAS THE ROUBLE RISEN SO MUCH AGAINST THE DOLLAR? The weakness of the US currency, whose index lost 6.6 per cent since President Donald Trump's "Liberation Day" tariff announcement on April 2, has helped the rouble Although the central bank says there is a freely floating exchange rate, it has been selling the Chinese yuan, its only major intervention tool, to support the rouble When the rouble strengthens against the yuan, its rate against the US dollar strengthens as well to avoid arbitrage HOW IS THE ROUBLE TRADED? Since sanctions hit the Moscow Stock Exchange (MOEX) in 2024, the rouble trades over-the-counter against the US dollar and euro Banks report their quotes to the central bank, which uses them to set the official rate The rouble is no longer a major internationally traded currency and many Western companies and banks have left Russia but the country remains a top oil and agriculture exporter and the world's 11th largest economy Russia's push to shift trade into non-Western currencies, especially the yuan, may have implications for the global dominance of the US dollar in the long-term WHY IS ROUBLE-YUAN THE BIGGEST PAIR? The yuan has overtaken the US dollar as Russia's most traded foreign currency Russia's total trade with China hit a record $US245 billion The rouble is up against the yuan by 25 per cent this year WHAT DOES THE RUSSIAN GOVERNMENT SAY ABOUT THE ROUBLE? The Russian government wants a weaker rouble to boost budget revenues If the rouble stays strong, analysts estimate the budget could lose 2.4 per cent of its revenues this year Exporters, from oil to metals to agriculture, are also hurting HOW DO ORDINARY RUSSIANS VALUE THE ROUBLE? The public still sees the US dollar as the benchmark, even though yuan use is rising Sanctions have made foreign travel and US dollar and euro international transfers harder, reducing demand for cash dollars WHAT LIES AHEAD FOR THE ROUBLE? A big test looms in early September, when a 50-day deadline set by US President Donald Trump for Russia to show progress toward peace in Ukraine expires If new US sanctions targeting buyers of Russian oil follow, the rouble could come under renewed pressure The last time the rouble weakened significantly was in November 2024, after Washington sanctioned Gazprombank, which had handled oil and gas payments
Perth Now
13 hours ago
- Business
- Perth Now
Why the rouble is one of the best performing currencies
The Russian rouble's 45 per cent rise against the US dollar since the start of the year has made it one of the world's best performing currencies - but the sharp appreciation is proving to be a double-edged sword for the heavily sanctioned Russian economy. WHY HAS THE ROUBLE RISEN SO MUCH AGAINST THE DOLLAR? The weakness of the US currency, whose index lost 6.6 per cent since President Donald Trump's "Liberation Day" tariff announcement on April 2, has helped the rouble Although the central bank says there is a freely floating exchange rate, it has been selling the Chinese yuan, its only major intervention tool, to support the rouble When the rouble strengthens against the yuan, its rate against the US dollar strengthens as well to avoid arbitrage HOW IS THE ROUBLE TRADED? Since sanctions hit the Moscow Stock Exchange (MOEX) in 2024, the rouble trades over-the-counter against the US dollar and euro Banks report their quotes to the central bank, which uses them to set the official rate The rouble is no longer a major internationally traded currency and many Western companies and banks have left Russia but the country remains a top oil and agriculture exporter and the world's 11th largest economy Russia's push to shift trade into non-Western currencies, especially the yuan, may have implications for the global dominance of the US dollar in the long-term WHY IS ROUBLE-YUAN THE BIGGEST PAIR? The yuan has overtaken the US dollar as Russia's most traded foreign currency Russia's total trade with China hit a record $US245 billion The rouble is up against the yuan by 25 per cent this year WHAT DOES THE RUSSIAN GOVERNMENT SAY ABOUT THE ROUBLE? The Russian government wants a weaker rouble to boost budget revenues If the rouble stays strong, analysts estimate the budget could lose 2.4 per cent of its revenues this year Exporters, from oil to metals to agriculture, are also hurting HOW DO ORDINARY RUSSIANS VALUE THE ROUBLE? The public still sees the US dollar as the benchmark, even though yuan use is rising Sanctions have made foreign travel and US dollar and euro international transfers harder, reducing demand for cash dollars WHAT LIES AHEAD FOR THE ROUBLE? A big test looms in early September, when a 50-day deadline set by US President Donald Trump for Russia to show progress toward peace in Ukraine expires If new US sanctions targeting buyers of Russian oil follow, the rouble could come under renewed pressure The last time the rouble weakened significantly was in November 2024, after Washington sanctioned Gazprombank, which had handled oil and gas payments
Newsweek
31-05-2025
- Business
- Newsweek
Russia's Economy Facing Triple Threat
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. Russia's economy faces the triple threat of a banking crisis, companies forgoing dividend payouts and a sharp downturn in growth as the sanctions-hit country experiences continued turbulence due to President Vladimir Putin's full-scale invasion of Ukraine. The Kremlin-linked Center for Macroeconomic Analysis and Short-Term Forecasting (CMASF) has warned of problems in the banking sector which include an increased likelihood of a run on banks, although it said a full-blown crisis has not happened yet. The CMASF has told Newsweek that a volatile stock market was one factor contributing to jitters. Newsweek has contacted Russia's Finance Ministry for comment. This stock image from January 11, 2025, shows notes of Russia's currency, the ruble. This stock image from January 11, 2025, shows notes of Russia's currency, the It Matters Russia's economy has so far weathered much of the western-led sanctions that were aimed at punishing Putin for his aggression and starving his war machine. However, relatively decent growth fueled by Putin's record military spending has been marred by inflation and a worker shortage impacted by those fleeing the draft and troop losses in Ukraine as experts warn of longer terms problems for the economy. What To Know The CMASF said in a report this week there is an increased likelihood of "a systemic banking crisis" in Russia. Such a crisis would involve at least one of three things; a run of the banks by depositors, non-performing loans exceeding 10 percent of total banking assets, or large-scale bank recapitalizations exceeding 2 percent of the country's GDP. None of those conditions have been met so far, but the risks are growing, it said. In emailed comments to Newsweek, the CMASF said a sharp increase in the volatility of the main index of the Russian stock market (MOEX) is a good indicator of greater economic uncertainty people feel. This week, Russia's stock market took a sharp dive following the threat by President Donald Trump of new sanctions and his jibe after Moscow's drone and missile barrage of Ukraine that Putin was "crazy." The CMASF also told Newsweek a sharp increase in the ratio of money supply to the monetary base reflects the increasing pressure on the liquidity of the Russian banking system. These factors taken together can increase vulnerability and the likelihood of banks experiencing "cash gaps". Fight and Flight In April, the CMASF warned there was an increased possibility of "depositor flight" or a run on the banks. This was caused in part by the prospect of an economic downturn due to Russia's Central Bank setting a key interest rate of 21 percent to curb inflation of 10.2 percent amid warnings this will stifle lending and investment. Russian Firms Forego Dividends It comes as the boards of two dozen Russian companies advised against paying out dividends to shareholders due to declining export revenues and sanctions. State statistics agency Rosstat said that in 2024, Russian companies generated total earnings of 30.4 trillion rubles ($381.1 billion) down 6.9 percent compared with 2023, or a 15 percent drop when adjusted for inflation. Firms in mining and energy are among those foregoing dividend payments. such as Gazprom, Norilsk Nickel, NLMK and Severstal, but other could follow suit, the Vedomosti business daily reported. The outlet reported that the suspension of dividends is linked not only to worse market conditions but also to the high cost of borrowing. Boris Grozovski, an expert on Russia's economy at the Wilson Center think tank, told Newsweek in January that the high key interest rate had put Russian companies in a very difficult position. Rising costs, higher energy tariffs, higher gasoline costs, higher wages, higher transportation and logistics costs, meant that net profits are decreasing, he added. Growth Slump As corporate borrowers are struggling to service their debt and more households accumulate bad loans, Rosstat said last week that growth in the first quarter of 2025 was only 1.4 percent. This is three times less than 4.5 percent in the final quarter of 2024 and almost four times less than 5.4 percent for the same period last year. The Russian economy faces not just a slowdown, but a likely recession, independent outlet The Bell reported, adding that latest official data suggests the economy could dip into negative growth as early as this summer. What People Are Saying Center for Macroeconomic Analysis and Short-Term Forecasting: "The current situation is characterized by the 'resonance' of several negative signals and trends indicating an increase in macro-financial risks." What Happens Next Although GDP growth has slowed, much depends on whether there is a peace deal in Ukraine which could see Trump restore trade between the U.S. and Russia. Kyiv and its allies want Washington to maintain economic pressure on Russia and U.S. lawmakers are drawing up a new list of possible sanctions, adding to anticipation on whether this could force Putin to the negotiating table.
Newsweek
27-05-2025
- Business
- Newsweek
Russia Sees $1 Billion Wiped off Stock Market After Trump's Putin Comments
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. Russia's stock market took a sharp dive following President Donald Trump's jibe that Vladimir Putin was "crazy" and threatening new sanctions. Vasily Astrov, an expert on Russia's economy, told Newsweek Tuesday that Trump makes contradictory comments on Russia almost daily, which causes stock market volatility. Trump issued the insult in a social media post—in which he also scolded Ukrainian President Volodymyr Zelensky—after Russia launched a massive aerial attack on Ukraine. The Russian financial services outlet Finam said Monday, the Moscow Exchange (MOEX) was "gripped by negative sentiment" as it fell over 2 percent, which led to market capitalization falling by a reported 100 billion rubles ($1.1 billion). Newsweek has contacted the Kremlin for comment. A stock image of a screen showing benchmark ruble-denominated MOEX index numbers in Moscow on January 10, 2023. A stock image of a screen showing benchmark ruble-denominated MOEX index numbers in Moscow on January 10, It Matters Trump's rhetoric on the war in Ukraine started by Putin is continuously shifting, and his latest comments followed a warning that the U.S. leader would be stepping back from peace talks if there is no progress. Kyiv, its allies and experts see U.S. sanctions on Russia, particularly on its fossil fuels, as key to pressuring Putin to the table and Trump's post threatening such measures will add to market jitters in the country's war economy. What To Know Trump took to Truth Social after Russia launched a massive attack on Ukraine over the weekend, with Moscow firing drones and missiles at 30 cities and villages and killing at least 12 people, including three children. Trump's post on Sunday boasted of his good relationship with Putin but said that the Russian president "has gone absolutely CRAZY" and was "needlessly killing" soldiers and civilians. Trump said that if Putin tries to take all of Ukraine "it will lead to the downfall of Russia," in the post which also took aim at Zelensky for "talking the way he does." The Kremlin responded by saying that the outburst was down to "emotional overstrain." Russia's stock market had fallen by 2.06 percent by 2.30 p.m. local time Monday, dropping to 2,711 points from its opening level of 2,735. By close of trading, it went down to 2,699, although by mid-morning Tuesday, there was a slight rise to 2,718. Sovcomflot—Russia's largest shipping company—had the biggest drop of more than 5 percent, while shares in energy and metals giant En+ Group, state-run Gazprom and tech firm VK Group also fell. Financial services outlet Finam said one of the main reasons for the drop was the geopolitical tensions following Trump's comments, which suggest that he is still considering tougher sanctions against Russia. The outlet also said the economic situation in Russia is "alarming" and that the reporting season for the first quarter has shown that even stable businesses are going through difficult times, affected by western sanctions, and the tight monetary policy of Russia's Central Bank, whose key interest rate is at 21 percent. Adding to pressure are reports that the EU is preparing to disconnect another 20 Russian banks from the SWIFT international payments system. Astrov, senior economist at The Vienna Institute for International Economic Studies, said that the slump in the stock market is "definitely the result of Trump's comments" rather than the prospect of EU action. What People Are Saying U.S. President Donald Trump on Truth Social: "I've always had a very good relationship with Vladimir Putin of Russia, but something has happened to him. He has gone absolutely CRAZY!" Vasily Astrov of the Vienna Institute for International Economic Studies said of the stock market slump: "This is definitely the result of Trump's comments, not EU sanctions…EU sanctions…had already been priced in—whereas Trump's statements on Russia contradict each other almost on a daily basis and result in Russia's stock market volatility." Financial services outlet Finam: "The Russian stock market is gripped by negative sentiment." What Happens Next The war Putin started is tied to Russia's currency and stock markets which took a hit in April following the collapse of scheduled ceasefire negotiations over the war in Ukraine. There is anticipation over whether Trump's warning will lead to sanctions that might add to further turbulence in Russia's economy.
Saba Yemen
16-05-2025
- Business
- Saba Yemen
Moscow stock exchange indexes rise as investors follow Istanbul negotiations
Moscow – Saba: The Moscow Stock Exchange indexes rose in trading on Friday as investors followed the progress of the negotiations in Istanbul regarding Ukraine. By 1:56 PM Moscow time, the ruble-denominated MOEX index rose 0.1 percent to 2,841.01 points, while the dollar-denominated RTS index rose 0.05 percent to 1,114.28 points. In the currency market, the Chinese yuan traded against the Russian currency at 11.174 rubles, up 0.5 percent from the previous closing price, according to Russia Today. The dollar traded on the Forex currency market at 80.91 rubles, and the euro at 90.352 rubles. Expert Bogdan Zvarish believes that "investors are currently taking a wait-and-see stance until the first news emerges regarding the negotiations in Istanbul. In today's session, investors will focus primarily on geopolitical news." He said, "The Moscow Stock Exchange index will begin to recover and attempt to reach the 2,900-point range. We expect the Russian market to trade between 2,820 and 2,920 points today." Whatsapp Telegram Email Print more of (Economy)
