The Russian Central Bank attributed the recent decline in the ruble against the US dollar to a temporary decline in “sales of foreign exchange earnings by exporters.” The Central Bank also revealed that the Chinese Yuan accounts for 39% of the total volume of the Russian forex market.
Temporary reduction in the sale of foreign currencies
Russia’s central bank said the ruble’s recent decline to its lowest level against the US dollar in 2023 was due to lower foreign exchange sales by the country’s exporters. The Central Bank’s statements came in the wake of media reports that attributed the ruble’s fall (to more than 80 units per dollar) to lower oil revenues and the impact of Western sanctions on the Russian economy.
Although it ended 2022 as one of the best performing currencies in the world, the Russian ruble fell more than 10% against the US dollar in 2023, and nearly 5% in the first week of April. However, Russia’s central bank insisted in its monitoring report unveiled on April 10 that the ruble’s recent decline may be temporary.
“There was a temporary drop in foreign exchange proceeds sales by exporters, which accelerated ruble weakness in early April,” the central bank reportedly said.
However, the central bank claimed that individuals and businesses have since responded to the depreciation of the currency by increasing foreign exchange sales.
Russian interest in the Chinese yuan increases
Meanwhile, the central bank also revealed that interest in China’s currency – the yuan – rose in March, after Russians bought $515 million worth of yuan. Before that, the Russians had bought just over $143 million worth of Chinese currency in the previous month. In addition, trades in the Russian forex market involving the yuan are said to have accounted for 39% of total volumes. On the other hand, ruble-dollar deals accounted for only 34% of the volume.
Since the imposition of Western sanctions as well as the removal of many banks from SWIFT’s financial telecom networks, the Russian government has called for an alternative to the US-dominated financial system. Russia has also sought to reduce its dependence on the US dollar by establishing bilateral currency agreements with countries such as China and India.
What do you think of this story? Tell us what you think in the comments section below.
Image credits: shutterstock, pixabay, wikicommons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services or companies. Bitcoin.com It does not provide investment, tax, legal or accounting advice. Neither the Company nor the author shall be liable, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.