While the U.S. dollar has soared in value against a basket of worldwide fiat currencies, Russia’s ruble climbed 4.5% against the greenback this week. Russia said to the media that China would pay natural gas in rubles or yuan during the first week. Moreover, Switzerland’s imports of Russian gold reached a high not seen since April 2020.
The Greenback Is Soaring, but Russia’s Ruble Is Also Rising Higher
The U.S. Dollar Currency Index, DXY (the U.S. Dollar Currency Index) soared to new heights this week leaving many fiat currencies around the world in serious trouble. For instance, two days ago, the European Union’s euro tapped a 20-year low against the U.S. dollar dropping to $0.973 on Friday.
At $0.9690 the euro is lower than the dollar and has fallen 2.82% in the past 30 day. The yen has fallen 4.72% in the past 30 days, while the sterling pound fell 8.17% and the Canadian dollar dropped 4.78%. For the first time in 2 years, the Chinese Yuan exceeded a 7-1 exchange rate with the U.S. dollars.
However, Russia’s native fiat currency the ruble has been more resilient this year, and it started to see gains a month after the start of the Ukraine-Russia war. Toward the end of June, Russia’s ruble tapped a seven-year high against the U.S. dollar, and at the time economists said “don’t ignore the [ruble’s] exchange rate.”
This Friday, while America’s native fiat currency climbed to new heights against various currencies worldwide, the ruble climbed 4.5% against the USD. The ruble managed to do this while the DXY breached a 20-year high following the Federal Reserve’s recent rate hike. The rising ruble follows Russian president Vladimir Putin explaining earlier this week that he vows to use “all means available” to win the war with Ukraine.
China Purchases Gas with Rubles and Switzerland Buys 5.7 Tons Of Russian Gold In August. An Analyst Says That Ruble Withdrawals Have Pushed the Currency Higher
He also suggested that Russia would launch a nuclear strike and said he was mobilizing even more troops. Reuters also reported that China was planning to purchase fuel from Russia using rubles and yuan.
Gazprom CEO Alexei Miller told the press at the time that China paying in rubles and yuan rather than dollars was “mutually beneficial” for both partners. Furthermore, reports indicate that the Swiss Federal Customs Administration revealed Switzerland imported 5.7 tons of Russia’s gold reserves in August. It was estimated that the stash had a value of $324 million. The Swiss haven’t purchased such a large cache in more than two years.
The country’s customs department, however, claims that the Russian gold originally stemmed from Britain, and it further stressed that no financial sanctions were violated. Switzerland denied violating any sanctions. It claimed that the bullion of 5.7 tons was first shipped to the U.K. in May.
While the ruble’s exchange rate against the greenback has dropped a hair, it remains at 56.87 per dollar, at the time of writing on Sunday, September 25, 2022. According to 30-day statistics, the euro is down by 2.82% against U.S. dollars. However, the Russian ruble has risen 4.32% over the same period.
Investing.com’s Geoffrey Smith says the surge for cash derived from Russians withdrawing massive amounts of money from their savings accounts. Smith further claims “Russians emptied their savings accounts in the wake of Wednesday’s mobilization call by President Vladimir Putin.”
He noted, however, that the surge in Friday’s ruble withdrawals was not nearly as large as the ruble withdrawals recorded last February. “The rise in demand for rubles led to a squeeze in interbank ruble rates, pushing the currency up in a market,” Smith wrote on Friday.
What do you think about the Russian ruble’s exchange rate skyrocketing this Friday and gaining 4.32% this month against the greenback? Comment below and let us know how you feel about the subject.
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