Last week the Russian ruble hit a seven-year high against the U.S. dollar and while analysts downgraded growth, one economist said people should not “ignore the exchange rate.” U.S. economists were perplexed about the ruble’s market performance and Russian officials were quoted as saying that a strong ruble “makes Russian exports more expensive”. In addition, US President Joe Biden continues to blame high gas prices on Vladimir Putin.
Vladimir Putin says Western sanctions obviously “failed”
Against the US dollar, the Russian ruble has been operating at the strongest level since May 2015 and some people have said that Western sanctions have failed. At the annual St. Petersburg International Economic Forum, Russian President Vladimir Putin said attempts to destroy the Russian economy did not materialize. “The idea was clear: to crush the Russian economy by force,” Putin said. “They did not succeed. Obviously that didn’t happen. ” Traditionally, when a country is widely sanctioned by a majority of countries, capital leaves the region and the total value of the currency against other trusted currencies would decline.
However, Russia is the second largest oil exporter and commands the top position as the the world’s largest gas exporter also. America and the European Union (EU) are trying hard to sanction Russia, but the EU is forced to buy gas and oil from the country in less obvious ways. Fortune India claims that India is apparently buying oil from the Russian Federation and reselling it to the EU for profit. The New York Post details that analysts believe the ruble’s strong performance is due to the Kremlin’s capital control and to the fact that oil and gas prices have risen globally. In addition to India, China and South Korea bought oil from Russia.
A study published by Bloomberg Economics estimates that Putin could accumulate about $ 321 billion in profits from energy exports alone. Tatiana Orlova, chief economist of emerging markets at Oxford Economics told CBS, however, that Russia’s import markets are crumbling at the seams. “In addition to rising export earnings, we have a collapse in Russian imports due to Western sanctions,” Orlova noted during an interview with CBS Money Watch. Max Hess, a fellow at the Institute for Foreign Policy Research, told CNBC that Russia is still earning record profits. Hess said:
That exchange rate you see for the ruble is there because Russia is earning record current account surpluses in foreign currency. Although Russia may sell a little less to the West now, as the West moves towards elimination [reliance on Russia], they still sell a tonne at ever-high oil and gas prices. So this brings a big current account surplus.
Service Providers Refuse to Upgrade ATMs in Russia, Biden Says Americans Will Have to Pay High Gas Prices “As Long as It Needs” to Stop Putin’s Ukrainian Invasion.
Meanwhile, the United States and various Western corporations are doing everything they can to stifle the Russian economy. Recently, the country’s central bank introduced the new 100-ruble banknote but ATMs are having problems with the new bill. Western sanctions have pushed ATM companies like NCR and Diebold Nixdorf to leave Russia. Supposedly, ATM service providers refuse to upgrade the ATMs and the machines reject the new banknotes. According to an unnamed source in the payment industry, Russian ATMs are not a priority. “Given the geopolitical situation, it is difficult to imagine that development for the Russian market will be a priority,” the source familiar with the matter explained.
On June 30, U.S. President Joe Biden was asked at a press conference of the NATO summit how long U.S. drivers will have to pay high gasoline prices at the pump. Biden said it would take “as long as necessary” to stop Putin’s Ukrainian invasion. “As long as necessary, so Russia cannot, in fact, defeat Ukraine and move beyond Ukraine,” Biden said. told the reporter. A Fortune report explains that U.S. citizens “seem to disagree” with Biden’s decisions. The report cites the latter Associated Press NORC Center for Public Affairs Research survey which shows a lack of faith in Biden’s leadership.
When it comes to tackling the U.S. economy, 70% of Americans, including 43% of Democrats, do not approve of the Biden administration. 60% of Americans do not approve of Biden’s leadership, 80% of U.S. citizens view the “economic conditions” of the United States. [are] poor and “67% of the 80% identified as Democrats. Biden and his administration, however, wholeheartedly believe Putin is to blame for rising world gas prices.” We could have turned a blind eye to Putin’s barbaric war against Ukraine. and the price of gas did not rise as it did, but the United States rose at the time, ”Biden said. said on June 27th.
What do you think about the strength of the Russian ruble and Biden says Americans should tolerate high gas prices because of Putin’s war? Let us know what you think about this topic in the comment section below.
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