On May 19 (US time), Bloomberg news agency reported that the Russian ruble has increased by about 12% against the USD since the beginning of April, becoming the currency with the strongest increase in the world during this period.
According to Bloomberg, the USD/ruble exchange rate has fallen to its lowest level since February 2023. This means that the ruble has strengthened significantly against the greenback.
One of the factors considered to support the ruble is rising energy prices amid tensions in the Middle East, especially after the conflict between the US, Israel and Iran. Higher oil and gas prices often help Russia increase revenue from energy exports, thereby supporting the domestic currency.
Bloomberg said this is the second consecutive year the ruble has appreciated, contrary to previous forecasts by many economic experts.
However, some analysts believe that the current increase may make the ruble higher than its real value. When the domestic currency strengthens too quickly, Russia's exports may become less competitive, while putting pressure on the budget, which is heavily dependent on oil and gas revenue.
Mr. Iskander Lutsko, Senior Portfolio Manager at Istar Capital investment company, said that current macroeconomic conditions are "very favorable" for the Ruble to continue to appreciate.
In addition to energy prices, the Ruble exchange rate is also affected by many other factors such as the monetary policy of the Central Bank of Russia, domestic capital flows and foreign exchange control measures.
In the past two years, the ruble has fluctuated sharply under the impact of Western sanctions, changes in energy trade and geopolitical developments.
However, the recent increase shows that the Russian currency is still being supported by energy export revenue and domestic economic conditions.
