The ruble has regained the majority of its losses, and Russia’s capital controls have made it the best-performing currency in the world this year, despite the fact that just a few individuals will benefit from the boom. The ruble climbed against the dollar again on Wednesday, when the Moscow Exchange reopened following a two-day vacation.
Since the beginning of the year, it has risen more than 11% against the US dollar, surpassing the real’s 9% gain to become the highest gainer among Bloomberg’s 31 major currencies. The offshore rate has climbed even more, by almost 12%. The ruble’s gains are the result of the government’s attempts to protect the damaged currency in the aftermath of Western sanctions.
In addition to capital controls, Russia has requested ruble payments for natural gas supplies from European nations, as well as pressing exporters to surrender their foreign exchange holdings. Nonetheless, the Kremlin’s market manipulations have surpassed those of other countries like Argentina and Turkey, which used similar measures.
Currency dealers, on the other hand, are set to stop utilizing the onshore exchange rate for some transactions since stringent capital controls have resulted in a bigger gap than the offshore ruble rate. Since June 6, the Trade Association for Emerging Markets has urged dealers to use the WM/Refinitiv rate to settle some derivative contracts.