Russia’s rouble has wiped out nearly all of the losses incurred after Vladimir Putin’s invasion of Ukraine as Moscow applies draconian capital controls and blocks most foreign traders from exiting their investments.
The currency’s rebound shows how Moscow has managed to fend off a collapse of the country’s financial system but at the cost of further isolating Russia from global finance and adding fuel to a powerful economic pullback.
In early March the rouble plunged to a 150 to the US dollar — losing almost half its value in less than a fortnight — after US and European sanctions cut Russia out of global payment systems and froze a large part of the more than $600bn war chest amassed by the country’s central bank. “As a result of our unprecedented sanctions, the rouble was almost immediately reduced to rubble,” president Joe Biden said during his visit to Poland last week.
Since then, the currency has perked up considerably, and on Thursday it traded at 81.7 to the dollar, roughly the same level as February 23, the day before Vladimir Putin sent his troops into Ukraine.
Oil and gas revenues have helped to stabilise the rouble, as exports continue flowing to Europe. But stringent curbs introduced by Moscow to prop up the rouble’s value have been crucial in staving off a deeper currency crisis, according to Oleg Vyugin, chair of the Moscow Exchange’s supervisory board and former deputy governor of the central bank.