Russian ruble hits one-year low against dollar and yuan

The Russian ruble fell to a one-year low against the US dollar and the Chinese yuan last week. On Thursday, the ruble fell to 97 rubles per dollar, its lowest level since October 2023. At the same time, the ruble-Chinese yuan exchange rate also fell to 13.72 rubles per yuan, its lowest level in a year.

5000 Russian Ruble banknote. Photo: Shutterstock

Pressure on the ruble is mounting as Russia faces the expiry of a key license from the US Treasury Department that allows transactions from some Russian financial institutions.

This license, which was scheduled to expire on October 12, has helped maintain transactions between the Moscow Exchange and the National Payment Center, allowing these transactions to gradually decrease instead of being abruptly suspended.

Currently, dollar and euro trading has been suspended on the Moscow Exchange, but it is likely that transactions with Chinese banks will also be restricted after the US Treasury license expires, which could reduce the supply of yuan to Russia, Reuters reported last month.

Russian banks have nearly run out of yuan reserves, as many Chinese banks have become wary of doing business with Russia due to tightening U.S. sanctions. Most Chinese banks have stopped processing transactions from Russia, leaving Russian businesses with billions of dollars blocked this year due to payment problems abroad, according to data from Russia’s central bank.

These new restrictions will add a major challenge to the Russian economy , which has been increasingly isolated from global markets since Russia began its conflict in Ukraine in 2022.

Still, a researcher at an independent think tank has said the Russian economy will likely continue to function for several years before facing major budget problems.

Dung Phan (According to Markets Insider)

Source: https://www.congluan.vn/dong-rup-nga-cham-muc-thap-nhat-trong-mot-nam-so-voi-do-la-va-nhan-dan-te-post316347.html