Russian Ruble Surpasses Brazil’s Real as Year’s Best-Performing Currency

[Hydrogen]

(Bloomberg) -- Capital controls imposed by Russia have turned the ruble into the world’s best performing currency this year, though not many people can pocket a profit on the rally.



image link:  https://i.ibb.co/TtBp8hY/russian-ruble.jpg

The ruble resumed its advance against the dollar on Wednesday as the Moscow Exchange reopened after two days of public holiday. It’s now up more than 11% against the US dollar since the start of the year, surpassing the real’s 9% advance to become the top gainer among 31 major currencies tracked by Bloomberg. The offshore rate is up even more, about 12%.

The ruble’s gains result from a series of measures taken by the government to defend the battered currency in the aftermath of Western sanctions. On top of imposing capital controls, Russia has forced exporters to sell foreign-exchange and is demanding its natural gas be paid for in rubles. Strategists say the rally isn’t credible as many currency-trading shops have stopped dealing in the ruble on the grounds that its value seen on monitors is not the price it can be traded at in the real world.

Still, the irony of the ruble performing so well while at war is remarkable, especially as other countries that imposed capital controls in the recent past have not achieved the same results. Turkey and Argentina tried similar measures when they faced a horde of sellers in the past few years with disastrous consequences for the lira and the peso, which reached fresh all-time lows and never recovered.

The ruble took over from the real as the world’s best performer as the end looms for Brazil’s monetary tightening, which is weighing on the currency. After raising the benchmark rate by 1,075 basis points since early 2021, policy makers in the Latin American nation have signaled a slowdown in the pace of hiking, as well as their intention to wrap up the cycle soon. While the real’s carry will remain high, the spread to US rates will likely shrink as the Federal Reserve keeps raising borrowing costs at an aggressive pace.



https://finance.yahoo.com/news/ruble-surpasses-brazil-real-best-162446964.html

....


Someone said russia is headed towards ruin and being outperformed by the united states economy.

At the moment, the russian ruble is up 11% versus the US dollar and rated the #1 performing currency of the year.

Meanwhile in the united states retailers are bracing for bad earnings reports due to inflation:

https://www.reuters.com/business/wall-st-week-ahead-retailers-set-earnings-stage-after-inflation-sparked-market-2021-05-14/

Evidence appears to suggest the US economy is weakening while the russian economy and its native currency is becoming stronger.

Where does this idea some have that russia's economy is doing poorly come from?

[Fortify]

....


Someone said russia is headed towards ruin and being outperformed by the united states economy.

At the moment, the russian ruble is up 11% versus the US dollar and rated the #1 performing currency of the year.

Meanwhile in the united states retailers are bracing for bad earnings reports due to inflation:

https://www.reuters.com/business/wall-st-week-ahead-retailers-set-earnings-stage-after-inflation-sparked-market-2021-05-14/

Evidence appears to suggest the US economy is weakening while the russian economy and its native currency is becoming stronger.

Where does this idea some have that russia's economy is doing poorly come from?

It is an illusion, Putin wanted the rouble to be propped up after it collapsed but as always this has unintended consequences - the central bank of Russia is dropping interest rates because a strong rouble means it buys less foreign currency. There are currency controls in place preventing free market corrections, foreign companies who want to escape are currently tied in from selling any assets at the best price (which is why ridiculous nationalisation plans are being drawn up). All of these are the actions of incredibly weak and short sighted politicians.

While it may generate huge sums from selling energy and have a nice reserve of funds, it is still a basketcase economy. This is what happens when corruption infects every part of a society and people do not have the structures around them that encourage innovative thoughts. It will survive in the short to medium term being economically isolated, but it has the potential to be so much greater if it had a better government.

The graph you posted effectively tracks the price of oil movements over the same timeframe - if the rest of the world fell into recession, the price of oil dropped, then Russia's undiversified economy would suffer among the worst.

[be.open]

It is an illusion..

When in Argentina and Turkey they tried to make the same illusion with similar methods, they did not succeed.

[NeuroticFish]

At the moment, the russian ruble is up 11% versus the US dollar and rated the #1 performing currency of the year.

Since what we have there is far from what we could call free market, since the ruble going up is a blatant scam/market manipulation, I don't know why we should compare that "performance" with anything else.
It's (yet another) highly cunning move from the Russians. Since some weaklings have accepted to pay in rubles for the already overpriced gas and oil, they'll pay even more, since the ruble is "strong". It would be funny if it wouldn't be so painfully sad. More money for Putin's war effort...

[cabron]

At the moment, the russian ruble is up 11% versus the US dollar and rated the #1 performing currency of the year.

Since what we have there is far from what we could call free market, since the ruble going up is a blatant scam/market manipulation, I don't know why we should compare that "performance" with anything else.
It's (yet another) highly cunning move from the Russians. Since some weaklings have accepted to pay in rubles for the already overpriced gas and oil, they'll pay even more, since the ruble is "strong". It would be funny if it wouldn't be so painfully sad. More money for Putin's war effort...

Well whoever have the energy resources will most likely going to rise up and Russia has the means to. The mainstream media are already realizing how misinformed we are when it comes to Russia's capacity. They were reluctant to publish these information before but now we are seeing it on Reuters. This network is known to rubbishly lie about everything we know about world issues but here they are. Gas and Oil made it happen as Putin asks to pay in rouble, its the law of supply and demand.

Brazil is also one of the biggest in Latin countries which Russia and Brazil is among the founding countries in the block called BRICS, its an economic block consisting Brazil, Russia, India, China and South Africa.

[StanCrypt]

It is true that despite escalating sanctions and the bullish pace of the greenback, the Russian ruble has seen significant gains versus the US dollar nearly ten weeks into the war. The ruble was up 20.32 percent against the dollar as at the begining of the month, trading at $67.09, down from $84 a month ago.
Fears of a eurozone recession, along with the Euro's bearish trend, have also reignited the possibility of the currency reaching parity with the US dollar.

https://nairametrics.com/2022/05/04/russian-ruble-gains-20-against-the-dollar-within-a-month/

But inspite of the fact that the ruble is currently swinging in value versus the dollar, the Russian economy is significantly showing indications of deterioration. Russia's economy is experiencing a downturn unlike any it has ever seen, and this and many reasons has made many educated Russians to apparently abandoning the country. In a report, the Institute of International Finance stated, "The current crisis will wipe out 15 years of economic improvement."

[Flexystar]

Certainly this is a trick. In fact while reading all those thoughts were running through mind, how is it even possible when they are almost cut off by the world's leader in terms of financial aspect and also trade and businesses too. It's highly impossible to go 11% in just two days and moreover they have already lost so many contracts, then how they are getting paid anyways?

May be the news where they imposed only ruble payments for oil payment could have triggered the market surge. Its all mind game at this point, there is no possible way they would have gotten so much capital.

[Moneyprism]

we don't know how the rubble will perform in the future .. in the short term the rubble's performance may be good but no one can guarantee the performance of this currency in the future .. especially when America manages to control their inflation and their economy starts to bounce back

[davis196]

This is just made up by the Russian central bank.
The Russian currency market is totally manipulated and controlled by the Russian central bank and the Russian government.
The Russian ruble isn't freely convertible on the global currency markets, which means that the real market value cannot be determined.
Imagine having one currency market with 10 traders and 1000 daily transactions on the one side and another market with 10000 traders making 100K daily transactions on the other side. Which currency market will provide more accurate prices? The second one, of course.
The market for Russian rubles looks more like the first one. I'm not trying to shit over Putin's financial policies, but the so called "stability" and "best performance" of the ruble is going to be used mostly for Putin's propaganda.

[Mauser]

Where does this idea some have that russia's economy is doing poorly come from?

The idea of the Russian economy failing is coming from western economics who base their argumentation on the sanctions the West has against Russia. This is of course a bit misleading because Russia is trading with the whole world. And if countries like Holland or Poland are being cut off from the gas trade its not that Russia will sit on all the excess gas. The whole world needs energy and many countries are still friendly with Russia. If the price is right they will keep buying from them. I think that the initial shock on the Russian economy came from the fear of a war between Nato and Russia. But the Western countries made it clear they are not going to intervene on Ukraine. We will have to watch over the next 12 month how hard the Russian economy is being affected. The currency markets might be the wrong indicator with the high inflation we see right now.

[stompix]

You're looking at the graphs of a Potemkin currency and funny enough you're believing it.

First, just like other failed currencies from the Zimbabwe dollar to the Iranian rial and the Venezuelan bolivar, the exchange rate men's nothing since, you can't go to a bank and ask for dollars at that rate, making it even worse in Russia you can't even ask for dollars at all.

This is not something new it's the same thing as the Soviet ruble, you had three exchange rates
- the official at one rube to 1.35 dollars that stayed nearly the same for a decade despite the country going bankrupt at every step
- the same official rate for export and import companies and government officials where the rate was far lower but was still supported by the state
- the real rate that was sometimes x10 lower for any citizen that wanted to buy real $

This is again the same, they are trying to prop the currency to save face, you can't have a currency that is printed at 20% with bank deposit going up, everyone knows what happens when you do so, you have the Anchor/ Terra fiasco once more, the same insane rate with money that can't come from anywhere as there is no money left.

Well whoever have the energy resources will most likely going to rise up and Russia has the means to. The mainstream media are already realizing how misinformed we are when it comes to Russia's capacity. They were reluctant to publish these information before but now we are seeing it on Reuters. This network is known to rubbishly lie about everything we know about world issues but here they are. Gas and Oil made it happen as Putin asks to pay in rouble, its the law of supply and demand.

And despite having more gas and oil and getting paid in rubles the USSR still went down the drain.
So, what's the majik trick the country with one of the lowest GDP per capita in Europe, competing with Moldova and Montenegro will pull out of the hat this time?

[Hydrogen]

.
So, what's the majik trick the country with one of the lowest GDP per capita in Europe, competing with Moldova and Montenegro will pull out of the hat this time?

Many said if the american national deficit becomes too large, the united states can simply invade another country to confiscate their wealth. Putin may read internet forums and have decided this is a good idea. If russia lacks GDP per capita they can simply invade and pillage ukraine to elevate their native GDP stats. (Sad it is, Putin may merely be echoing sentiments internet trolls made for many years.)

I got the impression russia's ruble is backed by petroleum reserves, natural gas and other commodities.

Venezuela was the wealthiest nation in south america when their currency was backed by oil commodities. Decline of oil exports made bolivar hyperinflation possible.

Overprinting of fiat currency trends with declining value. I am interested to know how people correlate the rising value of the russian ruble with Putin overprinting it. Russia is not close to being the worst offender as far as overprinting fiat currency goes.

[stompix]

Many said if the american national deficit becomes too large, the united states can simply invade another country to confiscate their wealth. Putin may read internet forums and have decided this is a good idea. If russia lacks GDP per capita they can simply invade and pillage ukraine to elevate their native GDP stats. (Sad it is, Putin may merely be echoing sentiments internet posters made for many years.)

Worked wonders when the USSR invaded Afghanistan!

I got the impression russia's ruble is backed by petroleum reserves, natural gas and other commodities.

So was the Soviet ruble.

Venezuela was the wealthiest nation in south america when their currency was backed by oil commodities. .

That was in the '70s, should we go back in time to when Timbuktu was a leading city because of the salt trade?

Overprinting of fiat currency trends with declining value. I am interested to know how people correlate the rising value of the russian ruble with Putin overprinting it.

People can't correlate the rising value because there is no rising value other than on the screens of Russia Today.
The whole exchange rate is fake as hell and you can see that in every clip from Russia, if you look at the exchange rate it looks like those tomatoes are 5$ per kilo, higher than everywhere in the world, apples 3$ per kilo but that's just because the exchange rate is fake, fake as it can possible be faked and that is seen in the prices too.
 

[countryfree]

It's all fake.

I've checked in Barcelona and Milano. There are currency exchange booths at the airports. They used to buy rubles, but not anymore. You could travel with a suitcase full of cash, if it's rubles, you couldn't do anything with it. Nobody's buying.

[Reid]

The economic breakdown of Russia is based on the perfection of the sanction. They thought every country will participate and join the crusade to lock them down in their own country without any imports or exports but they didn't.
Other countries badly needs gas and oil and without it they will be fucked. Middle-East countries oil distributors didn't have enough to fill all their tanks especially Europe so they'd go back to taking it from Russia.
The only catch is Putin won't accept any currency as payment. They want Ruble.   Demand is high, the circulation is better, and now is the result.

[Mometaskers]

Maybe the sanctions are not working. Or maybe its the effect of them demanding oil and gas to be bought in rubles. Or maybe they are manipulating the figures and this is something that they can easily do. Either way I'd take any figure coming out of there with skepticism.

It's all fake.

I've checked in Barcelona and Milano. There are currency exchange booths at the airports. They used to buy rubles, but not anymore. You could travel with a suitcase full of cash, if it's rubles, you couldn't do anything with it. Nobody's buying.

I guess that's one measure of a currency's true strength - whether people trust that it have and will retain value.

[DrBeer]

Evidence appears to suggest the US economy is weakening while the russian economy and its native currency is becoming stronger.

Where does this idea some have that russia's economy is doing poorly come from?

Thank you for amusing me (I'm sure not only)! Laughed heartily!
I won't talk about the US economy. But about the Russian economy with pleasure, especially since it is so beautiful.
Tell me, is it realistic for you, the economy that is on the world market, over the past few years has reduced its share from 2.4% to 1.7%, is this a powerful economy? And in general, how much or significant? Seriously ! With such success, one can speak about the economy of Burkina Faso, Armenia, Swaziland .. How do they differ from the Russian economy? And yes - they have no gas and oil, for sure !!! But the embargo will fix that very soon. And as one person said, "Russia is Zimbabwe with snow." Let's leave Zimbabwe alone, they are already not pleased that they are compared with Russia, let's take another country. Nigeria! Why ? And because Nigeria can, in many respects, be compared with Russia. In terms of population, Nigeria is larger than Russia. The economy is also resource-based. But only in Nigeria it is really growing, unlike "great Russia"

About the economy - I think a good indicator of the economy will be the standard of living of the country's population, right? So here we are back to Zimbabwe. The poverty rate in these two countries is essentially the same. In Russia, the truth is that propaganda is working to the fullest, telling how all the inhabitants of Russia are prospering, but .. this is a fake. Name me any developed country where ordinary foodstuffs are sold in installments? No, not exclusive giant tuna, from the auction, but ordinary bread and staple foods! I think this can be finished ... Information can be found extremely easily in open sources

[Sithara007]

I analyzed both sides of the argument here. IMO, the Russian central bank doesn't need to manipulate the currency in a big way to prop up the Ruble. Corporations such as Rosneft and Gazprom are required by law to convert 50% of their forex revenues to Ruble (it was 80% a few weeks back, but then the level was lowered by the government). Given the massive oil and gas revenues directed towards Russia, this step is alone to keep the Ruble exchange rates stable for a long time. And from what I heard, the other capital control measures are easing as well.

[be.open]

I analyzed both sides of the argument here. IMO, the Russian central bank doesn't need to manipulate the currency in a big way to prop up the Ruble. Corporations such as Rosneft and Gazprom are required by law to convert 50% of their forex revenues to Ruble (it was 80% a few weeks back, but then the level was lowered by the government). Given the massive oil and gas revenues directed towards Russia, this step is alone to keep the Ruble exchange rates stable for a long time. And from what I heard, the other capital control measures are easing as well.

It looks like you do not understand the essence of the problem that is now facing the Central Bank of Russia. He now needs not to strengthen the ruble, but rather weaken it - in order to benefit from Russia's huge trade surplus. Therefore, the reduction in the mandatory rate of sale of foreign currency for exporters to 50%, and the increase in the period of mandatory sale to 120 days (which actually completely cancels it). And the problem is that it seems that this is not enough - after the recent sharp reduction in the key rate, the ruble has weakened, but now it has begun to strengthen again. Because Europe now needs rubles to buy gas, and in Russia no one needs dollars and euros because of the loss of confidence in them and high sanctions risks.

[Darker45]

What's the big deal with this? Even the subheading itself of the article you are quoting suggests that this is net negative. The positive thing is that the ruble has become the "world’s best performing currency this year." On the other hand, this is because of the "capital controls imposed by Russia" and that "not many people can pocket a profit on the rally." That's 1 good news against 2 bad news.

Moreover, the news article also says that aside from imposing capital controls, Putin has also "forced exporters to sell foreign-exchange." That's besides "demanding its natural gas be paid for in rubles." That's a lot of extremes just to save the ruble from falling.

Still, however, "strategists say the rally isn’t credible as many currency-trading shops have stopped dealing in the ruble on the grounds that its value seen on monitors is not the price it can be traded at in the real world."

Also, that Russia succeeded, at least so far, where Turkey and Argentina failed doesn't amount to so much. It could simply mean Turkey and Argentina, fortunately or unfortunately, lack a Putin who's got a much tighter grip on everything within the country.