Russia’s levitating ruble: Why oil price collapse has NOT sent currency into FREEFALL
While low prices for ‘black gold’ keep shaking the world’s economies, and major oil-exporting nations are trying to weather the trend, the Russian national currency has proven it still has an ace up its sleeve. The collapse of oil prices at the start of March after Russia withdrew from the OPEC+ deal was a disaster for Moscow, which remains heavily reliant on oil exports to fund the budget. But then an odd thing happened: the price of oil lost 56 percent of its value in the year to date, as of May 7, but the ruble is down by only 19 percent over the same period. Like some Tibetan monetary monk, the ruble’s value has managed to levitate and stay up, even as the oil-price ground fell away from underneath it. The ruble’s value has long been tied to the price of oil and the two used to move in lockstep. That changed when the Russian Ministry of Finance introduced the so-called budget rule (aka the financial rule), which automatically siphons off any excess oil-export revenue to the N...