The Russian currency is now stronger against the US dollar than it was before Washington slapped new sanctions on Moscow last month over the alleged interference in the 2020 US presidential election.
On April 15, US President Joe Biden signed a decree imposing another round of sanctions on Russia. In addition to sanctions on individuals and organizations, and the expulsion of Russian diplomats, the US government also targeted the Russian debt market, expanding previous measures. This time, the US decided to prohibit American financial institutions from participating in the primary market for ruble or non-ruble denominated government bonds issued after June 14.
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Even before the measures were officially announced, concerns about the possible US move shook the Russian stock market and the ruble. Days before the sanctions were revealed, the Russian currency fell to 78 against the greenback – its lowest level in five months. This was partly due to the sell-off of Russian government bonds by foreign holders. Such a situation usually weakens the national currency, as investors then convert the ruble into other currencies.
After the Biden administration confirmed the restrictions, the ruble sank again against its previous closing level. However, it did not fall lower than before, and even reversed some of its previous losses to trade at around 76 per dollar.
The Russian currency has strengthened since then. As of Monday afternoon, it stood at around 74 per US dollar – the same level it was in mid-March, before the latest sanctions were revealed.
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