Russia's currency hit its strongest point during the past two years even though oil costs went down. Bank experts think the ruble costs more than it should right at this moment. Alexander Vedyakhin from Sberbank believes one dollar should equal between 90 and 95 rubles under normal conditions. He pointed out that current oil prices and economic numbers support this range. The actual exchange rate differs from what makes sense.
Several things push the ruble higher than expected levels. The foreign money market shrank significantly and made trading harder. Companies face shipping problems when they buy and sell goods across borders. Money transfers take much longer to complete than before. Government budget rules also affect how the currency behaves.
High interest rates make people want to save rubles instead of buying dollars. Russian savers earn good money when they keep their cash inside the country. Dollar accounts barely make any profit and sometimes lose value. People have little reason to exchange their rubles for American money. Foreign cash becomes less appealing when local money pays better.
Russians struggle to spend dollars and euros inside their country. These foreign currencies work better outside Russia's borders. Most businesses and stores only accept rubles for daily purchases. The demand for foreign money stays very low because people cannot use it easily. Sberbank represents about one third of Russia's entire banking system and the government controls half the company.
Several things push the ruble higher than expected levels. The foreign money market shrank significantly and made trading harder. Companies face shipping problems when they buy and sell goods across borders. Money transfers take much longer to complete than before. Government budget rules also affect how the currency behaves.
High interest rates make people want to save rubles instead of buying dollars. Russian savers earn good money when they keep their cash inside the country. Dollar accounts barely make any profit and sometimes lose value. People have little reason to exchange their rubles for American money. Foreign cash becomes less appealing when local money pays better.
Russians struggle to spend dollars and euros inside their country. These foreign currencies work better outside Russia's borders. Most businesses and stores only accept rubles for daily purchases. The demand for foreign money stays very low because people cannot use it easily. Sberbank represents about one third of Russia's entire banking system and the government controls half the company.
