While the U.S. dollar soared against a basket of global fiat currencies, the Russian ruble gained 4.5% against the greenback this week.In the first week of September, Russia told the press that China will pay for the ruble and yuan to pay for natural gas, it said. In addition, Swiss imports of Russian gold reached their highest level since April 2020.
The greenback is soaring, but so is the Russian ruble
This week, theU.S. Dollar Currency Index (DXY)surged, while the Dollar Currency Index (DXY)was hit hard by many global fiat currencies. For example, two days ago, the EU euro hit a 20-year low against the U.S. dollar, falling to $0.973 on Friday.
Now the euro is even lowerhaving fallen 2.82% against the dollar over the past 30 days. Also in the 30-day statistics, the yen is down 4.72%, the pound is down 8.17%, and the Canadian dollar is down 4.78%. The Chinese yuan broke through
However, Russia’s home currency, the fiat ruble, has been resilient this year and began to rise a month after the Ukraine-Russia war began; it hit a seven-year high against the U.S. dollar at the end of June, and economists at the time said “the (ruble’s) exchange rate should not be ignored.”
This Friday, the rublegained 4.5%against the US dollar while the US fiat currency appreciated against various currencies around the world. The ruble managed to do so as the DXY hit a 20-year high following the Federal Reserve’s recent interest rate hikes. The ruble’s rise follows Russian President Vladimir Putinexplaining earlier this weekthat he will use “all available means” to win the war against Ukraine.
China paid for gas in rubles, Switzerland bought 5.7 tons of Russian gold in August, and analysts noted
that ruble withdrawals sent the currency soaring.
There were also detailed reports from the Russian president suggesting nuclear retaliation and mobilizing more troops. In addition, Reutersreportedin the first week of September that China would purchase fuel from Russia for payment in rubles and yuan.
Gazprom CEO Alexei Miller told the press at the time that it would be “mutually beneficial” for both partners if China paid in rubles and yuan rather than dollars. Additionally,according to the pressthe Swiss Federal Customs Administration revealed that Switzerland imported 5.7 tons of Russian gold reserves in August. The gold is worth roughly $324 million, and Switzerland has not purchased gold of that size in more than two years.
However, the country’s customs insisted that the Russian gold was originally brought in from the UK and further stressed that it did not violate any financial sanctions. Switzerland flatly denied any violation of sanctions and said the 5.7 tons of gold bullion was originally shipped from the UK in May.
Although the ruble’s exchange rate against the U.S. dollar has dropped a hair, it is at ¥56.87 to the dollar as of this writing on Sunday, September 25, 2022. 30-day statistics show that the euro is currently down 2.82% against the U.S. dollar, while the Russian The Russian ruble has gained 4.32% this month.
Geoffrey Smith of Investing.com said the surge in cash comes from Russians withdrawing large amounts of money from their savings accounts. Smith further claims that “Russians emptied their savings accounts in the wake of Wednesday’s mobilization request by President Putin.”
{He noted, however, that Friday’s surge in ruble withdrawals was not as large as the ruble withdrawals recorded last February. Wrote Smith on Friday, “The increased demand for rubles led to a tightening of interbank ruble rates, pushing the currency up in the market.”
What do you think about the Russian ruble’s exchange rate surging this Friday, up 4.32% this month against the dollar? Let us know what you think about this subject in the comments section below.
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