In the recent three months, the Russian ruble has been rising in value against the US dollar and other popular currencies. Such a dynamic allowed the Russian currency to be the leader among them.
However, the process of strengthening cannot be considered persistent as Russia’s economy went into a nosedive. The lower key interest rate ensures better credit terms. However, many experts raise doubts about a further decline in the inflation rate.
In April, the US dollar fell 6.65 rubles and the euro lost 4.75 rubles when trading on the Moscow Exchange. The dual currency basket dropped 9.7% in value to 54.31 rubles.
From January to April 2015, the ruble outpaced 33 currencies circulating in the countries which are Russia’s trade partners.
A lot of global analytical firms noted attractiveness of the Russian ruble that enhanced the speculative aspect of the ruble-related trade. Besides, activation of carry trade ensured that speculators converted extra funds in rubles.
As a counter-measure, Russia’s central bank raised the key interest rate in December. Besides, the watchdog used verbal interventions to halt the ruble depreciation. Russia’s Minister of Economic Development Alexey Ulyukaev believes that the ruble is capable of retaining its firm current values. “From my viewpoint, as the Bank of Russia is pursuing the free float policy, the ruble will be falling and rising. On the whole, I expect fluctuations to be within the corridor that we see nowadays,” the minister made a comment.
Besides, Russia’s Finance Minister Anton Siluanov highlighted that “the ruble has strengthened more than expected.” He said those who used to buy a foreign currency opt to buy rubles now.
Recently, the board of directors of the Russian central bank decided to slash the key interest rate to 12.5%. The regulator is ready to trim the key interest rate again as long as inflation risks continue to ease.
