The Russian ruble fell to its lowest level in more than seven months on December 19. The reason is the imposition of sanctions on the export of Russian oil.
Reuters writes about it.
So, on December 19, 1 dollar can be exchanged for 68.4 rubles – this is the lowest figure since May 11. However, the Russian currency later rose slightly to 67.41 against the dollar.
The ruble also hit a seven-month low against the euro, dropping to 71.71. All in all, the value of the Russian currency fell by about 10% in December.
what are the reasons?
As Yulia Melnikova, an analyst at Alfa-Capital, explained to Reuters, the ruble’s decline is linked to fears that the oil embargo and restrictions on oil prices will reduce Russia’s export income from this energy company. Decreased income could, in turn, lead to an increase in the budget deficit in parallel with the gradual recovery of imports.
Reuters also notes that the sharp depreciation of the ruble on December 19 occurred after the start of Russian President Vladimir Putin’s visit to Belarus. According to the publication, this trip raised fears in Kyiv that Putin might pressure Alexander Lukashenko and encourage him to get Belarusian forces involved in the war.
On December 3, the European Union agreed to implement new sanctions related to reducing prices for Russian crude oil and petroleum products. This level is $60 per barrel.
It also became known on December 3 that the G7 countries and Australia joined the EU’s decision to reduce the price of Russian oil. And on December 16, Switzerland joined these restrictions.
The Kremlin responded that Russia would not accept restrictions on oil prices. To date, the Russian Federation is “analyzing the situation”.
Russia lost 90% of its main European oil market before the embargo – Bloomberg