The Russian ruble has plunged to its lowest level against the U.S. dollar in 32 months, raising concerns over the nation’s economic stability. As of late November 2024, the ruble has been trading at around 108 to 110 rubles per dollar, a significant drop from its value earlier in the year. This sharp depreciation comes amid a combination of factors, including Western sanctions, a decline in oil revenues, and ongoing geopolitical tensions due to Russia’s involvement in Ukraine.
One of the major drivers of the ruble’s weakness is the sustained sanctions imposed by the U.S., European Union, and other Western allies. These sanctions have significantly restricted Russia’s access to global financial markets and limited its oil exports. Despite efforts to pivot toward non-Western trading partners, the sanctions have created a long-term drag on the Russian economy.
Additionally, the drop in global oil prices has been a key factor in the ruble’s decline. Russia is highly dependent on oil and gas revenues, and any significant decrease in prices affects the nation’s ability to generate foreign currency. According to the Russian Ministry of Finance, the country’s budget deficit widened to 3.3 trillion rubles (about $40 billion) in 2024, as oil exports decreased by 20% from last year.
In response to the currency’s devaluation, the Russian central bank has raised interest rates, but this has failed to stabilize the ruble. Inflation has also spiked, with consumer prices rising by 12% in the last 12 months, further eroding the purchasing power of ordinary Russians.
Experts warn that unless there is a substantial shift in either geopolitical dynamics or global oil prices, the ruble may continue to face downward pressure, leading to more economic hardship for Russia in the months ahead.
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