Ruble tumbles to lowest level since the early weeks of Russia’s war on Ukraine

Man walking past a currency exchange office in Moscow
A man walks past a currency exchange office in Moscow, where the Russian ruble has reached its lowest value against the dollar since the early weeks of the war in Ukraine.
(Alexander Zemlianichenko / Associated Press)
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The Russian ruble has dropped to its lowest value since the early weeks of the war in Ukraine as Moscow increases military spending and Western sanctions weigh on its energy exports.

On Monday, the Russian currency passed 101 rubles to the dollar, continuing a more than 25% decline in its value since the beginning of the year and hitting the lowest level in almost 17 months.

President Vladimir Putin’s economic advisor, Maksim Oreshkin, on Monday blamed the weak ruble on “loose monetary policy” in an op-ed piece for the state news agency Tass. He said that a strong ruble was in the interest of the Russian economy and that a weak currency “complicates economic restructuring and negatively affects people’s real incomes.”


Oreshkin said Russia’s central bank has “all the tools necessary” to stabilize the situation and said he expected normalization shortly.

The bank is adhering to a floating exchange rate because “it allows the economy to effectively adapt to changing external conditions,” central bank deputy director Alexei Zabotkin told reporters Friday.

Analysts say the weakening of the ruble is being driven by increased defense spending — leading imports to rise — and falling exports, particularly in the oil and natural gas sector. Importing more and exporting less means a smaller trade surplus, which typically weighs on a country’s currency.

Russia has weathered sweeping economic sanctions over the Ukraine war better than many expected, but the months ahead could pose a tougher test.

March 13, 2023

The Russian economy is now “working on different types of state orders related to the war, such as textile enterprises, pharmaceuticals and the food industry,” said Alexandra Prokopenko, a non-resident scholar at the Carnegie Russia Eurasia Center and a former Russian central bank official.

Pivoting the entire economy to a war footing not only drives up imports but also raises the prospect of worsening inflation, she said.

To help lessen that prospect, the central bank said last week that it would stop buying foreign currency on the domestic market until the end of the year to try to prop up the ruble and reduce volatility.


Russia typically sells foreign currency to counter any shortfall in revenue from oil and natural gas exports and buys currency if it has a surplus.

Russia launched three waves of nighttime air attacks against Odesa, but Ukraine says it intercepted all 15 incoming drones and eight missiles.

Aug. 14, 2023

The central bank also enacted a big hike of 1% to its key interest rate last month, saying inflation was expected to keep rising and the fall in the ruble was adding to the risk. Zabotkin indicated that the rate — now at 8.5% — could be hiked again at the next meeting Sept. 15.

On Monday, some Russians in Moscow appeared concerned about the weakening currency.

“Prices will rise, which means that the standard of living will fall. It has already fallen, and it will fall even more — there are definitely more poor people,” said Vladimir Bessosedny, 63, a retired teacher.

Others hoped that the fall of the ruble was temporary and that it would stabilize.

In January, the ruble traded at about 66 to the dollar but has lost about a third of its value since.

After Western countries imposed sanctions because of Moscow’s invasion of Ukraine in February 2022, the ruble plunged in value to as low as 130 to the dollar, but the central bank enacted capital controls that stabilized its value. By last summer, it was in the 50-60 range against the dollar.

Zabotkin said Friday that international sanctions had cut off a significant amount of imports to Russia, contributing to the ruble’s fall, but he dismissed speculation that capital flight from Russia also was to blame, saying the idea was “not substantiated.”