The Russian ruble continues falling in Tajikistan
On Thursday, July 6, the National Bank of Tajikistan (NBT) set the exchange rate of the Tajik national currency, the somonis (TJS), against the Russian ruble (RR) at 0.120:1.00.
Before that, the exchange rate of RR against TJS was at such a low level on December 6, 2016. But already next year, the somoni hovered around 0.140 to 0.150 to 1.00 Russian ruble, and in recent years, the exchange rate of RR against TJS has varied approximately within this range.
After the start of the armed Russian-Ukrainian confrontation, sharp exchange rate fluctuations have begun both in one and another side.
In mid-June, the exchange rate of RR against TJS dropped from 1:0.130 to 1:0.120. By the beginning of the current month, the exchange rate of the RR against TJS has stood at 1:0.122,
The depreciation of the RR against TJS has taken place against the backcloth of the depreciation of the RR against the UD dollar (USD).
According to data from the Central Bank of the Russian Federation, the RR has lost 7.1 percent of its value against USD since June from RR84,32 per 1.00 USD to RR90.34 per 1.00 USD.
CGTN reported in April this year that the Russian ruble, has recently been the subject of concern due to its depreciation. Some Western media reports have claimed that it is a sign of an impending economic collapse in Russia. “However, upon closer inspection, we can conclude that the Russian ruble's depreciation is not as worrisome as some have suggested,” CGTN noted.
Before the Russia-Ukraine conflict, the Russian ruble was relatively stable, hovering around 70 to 80 Russian rubles to the U.S. dollar for over a year. This changed when the United States and Europe announced sanctions against Russia in February 2022, causing the Russian currency to plummet to around 126 Russian rubles to the U.S. dollar.
To combat these sanctions, the Russian Central Bank raised interest rates to an all-time high of 20 percent overnight which caused the Russian ruble exchange rate to undergo a V-shaped reversal, proving to be an effective measure.
The rapid appreciation caused by the interest rate hike led to the "overshooting" of the Russian ruble whereby the exchange rate rose to an excessively high level - a peak of approximately 50 Russian rubles to the U.S. dollar in June 2022 - before it gradually returned to normal.
CNN reported that Russia’s currency hit its lowest level in nearly 15 months on June 26, 2023 after Wagner mercenaries led a short-lived rebellion against the Kremlin over the weekend.
The ruble briefly traded at around 87 per US dollar before paring back some of its losses, last trading at around 84.40 against the greenback.
The June 26 drop came after Russians scrambled to swap their cash for dollars over the weekend, when Russian banks were asking way above the official rate of 90 rubles for each greenback, Reuters reported.
The ruble stayed surprisingly resilient for most of last year, buoyed by the Russian central bank’s aggressive interest rate hikes and capital controls.
“The Central Bank says it sees no financial stability risks due to depreciation of the exchange rate of the Russian ruble,” Ms. Kseniya Yudayeva, the first deputy head of the Russian Central Bank, told RBK, adding that that financial regulator does not see the need to return the mandatory sale of foreign exchange earnings against this background.