In 2023, the Russian ruble showed the strongest decline since 2015 and entered the top 3 of the ranking of the weakest currencies in the world, as tracked by Bloomberg.
The dollar rose by 26% to 90.36 rubles from 71.8 rubles at the beginning of the year at the close of the last trading session on December 29.
The euro rose by 28%, from 76.2 to 97.7 rubles, and the Chinese yuan by 24%, from 10.14 to 12.61 rubles.
Only two currencies in the world showed a stronger decline against the dollar: the Turkish lira (by 36.6%) and the Argentine peso (by 78%).
The devaluation of the ruble could have been even stronger: in August, the growth of currency exchange rates reached 30-40%, the dollar was worth more than 100 rubles, and the euro broke through the 110 mark.
In response, the Central Bank sharply raised its key rate from 7.5% to 16% per annum, and the authorities first demanded, in a non-public statement and then by presidential decree, that exporters sell more currency on the exchange to support the foreign exchange market.
Since October, the top four dozen companies have been required to deposit 80% of their foreign currency earnings in Russian banks and sell 90% of this volume on the exchange. Those who threaten the ruble can be cut off from trading by the Central Bank.
The Kremlin has recognized the $100 dollar as a threat to the regime, which is why the Central Bank was instructed to urgently intervene to stabilize exchange rates and inflation ahead of the March 2024 elections, Bloomberg sources said.
The Putin administration expects the dollar to drop to 75-80 rubles before the election. According to one of them, Putin does not "like" the 90-100 ruble exchange rate, even though it helps fill the budget, and the strengthening of the ruble should show that the "situation" in the country is "improving."
The authorities will be able to keep the ruble at least until spring, while the presidential decree on the mandatory sale of foreign currency is in effect, after which the rates will creep up again, and by winter 2024, a dollar will cost 103 rubles, according to economists interviewed by Reuters.
The ruble has been hurt by a sharp decline in foreign currency inflows: the Gaidar Institute estimates that in 2023 the Russian economy will receive $420 billion in export earnings, the lowest amount since the 2020 pandemic, 29% lower than a year earlier and 15% less than before Russia's invasion of Ukraine.