Urgent: The ruble ignores sanctions and bankruptcy…and exceeds May 2015 levels
Despite the controversy raging since the beginning of the week regarding the imposition of a new package of sanctions on Russia by Washington and the Group of Seven, coinciding with Russia’s failure to pay its debts for the first time in 104 years.
The Russian ruble, which is trading at its highest level in more than seven years against the dollar and the euro, succeeded in surpassing new levels during trading today, Tuesday, July 28, 2022.
On May 29, 2015, the ruble was last seen at 52.32 rubles per dollar when it ended the day’s trading higher against the US currency by more than 0.5.
During these moments of trading today, Tuesday, the ruble succeeded in recording the highest price ever since May 29, 2015, reaching levels near 52.6964 rubles to the dollar, recording an increase of about 1.3%.
The Russian ruble rose against the dollar this June from the levels of 61.5 rubles closing on May 31 to the current levels during Tuesday’s trading, an increase of more than 14%.
The ruble rose from its lowest level ever on March 7, when it fell to the bottom of 158 rubles to the dollar after the imposition of Western sanctions on Russia due to the invasion of Ukraine, to rise today by 67%.
Since the beginning of the Russian invasion of Ukraine on February 24, the ruble has risen from the levels of 84.0475 rubles on the morning of the invasion to the current levels, an increase of 37%.
While the Russian ruble succeeded in taking the lead in currency gains against the dollar since the beginning of the year, to take the title of the best since the beginning of the year, as it rose from levels of 74.6539 to the current levels, an increase of 30%.
Bankruptcy..we did not go bankrupt
By the end of last night, Russia became for the first time in 104 years, specifically from 1918, to be unable to pay foreign debts and dues in foreign currencies, and Moody’s described the Russian default as the first since World War I.
Russia has defaulted on foreign currency debt for the first time in more than 100 years, as the grace period for interest payments of about $100 million that was due on May 27 expired on Sunday, a deadline for default.
In turn, Russian President Vladimir Putin decided to pay off foreign debts in rubles, and issued a new decree on the temporary procedure for the implementation of obligations of state debts of the Russian Federation to residents and foreign creditors, denominated in government securities, whose face value is indicated in foreign currency.
The press secretary of the President of the Russian Federation, Dmitry Peskov, said that allegations of default in this case are completely unjustified, because in May, the necessary payment was made in foreign currency.
At the beginning of the week, as the G7 meeting kicked off, the British government said in a statement that the government of the United Kingdom, the United States of America and Japan had decided to prevent the import of gold from Russia.
US President Joe Biden officially announced Sunday that the United States and the Group of Seven countries will ban the import of Russian gold, which is the country’s second largest export after energy.
On the other hand, the press secretary of the President of the Russian Federation, Dmitry Peskov, said that gold will be sold from Russia to those countries where there are more legitimate economic systems, commenting on the plans of the Group of Seven countries to impose a ban on the import of Russian gold.
US President Joe Biden announced Sunday that the Group of Seven countries will impose a ban on the import of Russian gold, and according to news, the ban will be officially announced on June 28 earlier on Monday.
A senior US official said the collective actions of the Group of Seven against Russia would have a dramatic impact on the Russian economy.
The group is heading to set a ceiling for the price of Russian oil and ban Russia’s exports of gold, after the British government announced that Britain, America, Canada and Japan decided to prevent the import of gold from Russia.
US President Joe Biden wrote on Twitter: The US has imposed more sanctions on Putin to deprive him of the revenue he needs to fund his war against Ukraine.
“The G7 will jointly announce that we will ban the import of Russian gold, a major export that brings tens of billions of dollars to Russia,” the US president added.
US President Joe Biden announced that after the US Congress revoked Russia’s most-favoured-nation trade status, the United States will impose increased tariffs on more than 570 groups of Russian goods worth about $2.3 billion.
In addition, the G7 countries are striving to use the additional income obtained as a result of increased tariffs on Russian goods to help Ukraine.
Plans to discuss reducing oil prices at the G7 summit were announced by European Commission President Ursula von der Leyen and European Council President Charles Michel.
The US Commerce Department imposed the first restrictions against companies that help Russia circumvent sanctions, and many companies from around the world will join the list and be banned from purchasing US-made goods and technology, particularly semiconductors.