In the first week of September, Russia told the press that China would pay for its natural gas in rubles and yuan. In addition, Russian gold imports by Switzerland reached a peak not seen since April 2020.
The greenback is soaring, but the Russian ruble is also up.
This week, the Dollar Monetary Index (DXY) hit new highs. For example, two days ago, the euro hit a 20-year low against the U.S. dollar, falling to $0.973 on Friday.
Currently, the euro is even lower at $0.9690, and is down 2.82% against the greenback over the past 30 days. The 30-day statistics show that the yen is down 4.72%, the British pound is down 8.17% and the Canadian dollar is down 4.78%. The Chinese yuan has surpassed a 7:1 exchange rate against the U.S. dollar for the first time in two years.
However, the ruble has been more resilient this year, and began making gains a month after the start of the Ukraine-Russia war. Toward the end of June, the Russian ruble reached a seven-year high against the U.S. dollar, and at the time, economists said “don’t ignore the ruble“.
This Friday, as the U.S. fiat currency hit new highs against various currencies around the world, the ruble… gained 4.5%. against the dollar. The ruble managed to do so as the DXY hit its highest level in 20 years after the Federal Reserve’s recent rate hike. The ruble’s rise follows Russian President Vladimir Putin. explaining earlier this week that he is committed to using “all available means” to win the war with Ukraine.
China pays for gas in rubles, Switzerland bought 5.7 tons of Russian gold in August, analyst says ruble withdrawals have driven up the currency.
The Russian president also hinted at nuclear retaliation and said he was mobilizing more troops. In addition, Reuters reported that in the first week of September China would buy fuel from Russia by paying in rubles and yuan.
Gazprom CEO Alexei Miller told reporters that China paying in rubles and yuan rather than dollars was “mutually beneficial” for both partners. In addition, reports indicate that the Swiss Federal Customs Administration revealed that Switzerland imported 5.7 tons of Russia’s gold reserves in August. The value of the reserve was about $324 million, and the Swiss had not bought so much gold for more than two years.
The country’s customs department, however, claims that the Russian gold originally came from Britain and stresses that no financial sanctions were violated. Switzerland has completely denied violating the sanctions and said the 5.7 tons of bullion were shipped from the UK last May.
Although the ruble’s exchange rate against the greenback has fallen, it remains at 1. 56.87 per dollar. While 30-day statistics show that the euro is currently down 2.82% against the U.S. dollar, the Russian ruble is up 4.32% this month.
Geoffrey Smith of Investing.com says the surge in cash is due to Russians withdrawing massive amounts of money from their savings accounts. Geoffrey Smith also states that “Russians emptied their savings accounts following President Vladimir Putin’s call for mobilization on Wednesday.“
He noted, however, that Friday’s spike in ruble withdrawals was nowhere near as large as the ruble withdrawals recorded last February. “The rise in demand for rubles has led to a tightening of ruble interbank rates, pushing the currency higher in a market“, Geoffrey Smith wrote on Friday.