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The Russian Ruble Is Stronger Than Ever. What Gives?
The economic currents working against the West
The economic sanctions imposed on Russia by a large number of nations in response to their invasion of Ukraine were supposed to cripple their economy and grind the war effort to a halt. Instead, Russia continues to weather the storm with surprising resiliency. At first, the sanctions looked like they were doing their job when the ruble dropped to less than one cent against the dollar. That was on March 1st. Today, the ruble has made a stunning recovery. It is now the best performing currency in the world thus far in 2022 and has rebounded to nearly 2 cents against the dollar and has increased 45% in value since January.
Not one to willfully lose control of a carefully crafted narrative, the media is now saying that the ruble is so strong it could be harmful to Russians. Even when they’re winning, they’re losing. But that doesn’t change the fact that the ruble has survived an economic storm against all odds and is now in a position that no one predicted just three months ago.
So what happened? Why is the ruble doing so well when the rest of the world has been determined to see it fail?
Favorable Economic Environment
Without the war in Ukraine and Western sanctions, Russia’s economy would be absolutely booming today. That is because the current state of the world economy is tailor made to make Russia rich. Oil and natural gas prices are at historic highs. Gold is up. Raw material commodities are up. Lumber has been up. Nearly everything that Russia exports is presently at historic highs or has recently been at a historic high. That means more and more money is flowing into Russia despite NATO’s best efforts to stop it.
The ruble continues to march on in spite of the fact that Russia defaulted on its largest share of international debt since the Russian Revolution. Countries also spurned Russian demands that they pay for products and debt in rubles.
But that is not all that is helping the ruble stay afloat.
The West has also isolated Russians which has forced them to rely on the ruble more than they have had to in the past. With foreign businesses pulling out…
