Russia Takes Action to Prop Up Ruble

(AmericanProsperity.com) – According to a Financial Times October 30 report, Russia has imposed more currency controls as the Kremlin keeps trying to prop up the country’s ruble. The media outlet pointed out that Russian authorities will now prevent international firms and companies operating in the country from selling their Russian assets and changing them for euros and dollars.

Under the new government restrictions, any foreign firm or company that wants to leave Russia because of its invasion of Ukraine will have to sell each of its assets in rubles. Citing people familiar with the matter, the Financial Times explained that these businesses will face long delays and massive financial losses if they insist on receiving any other currency for transfers abroad.

Since the invasion of Ukraine started in February 2022, the ruble has weakened so much that it lost over 20 percent of its value against the US dollar in 2023. Different reports showed that Russia’s currency passed the level of 100 rubles per dollar back in August. While it managed to recover after Russian authorities introduced export restrictions and raised interest rates, it crossed the so-called “100 barrier” again on October 3.

Since August, the Russian Central Bank has increased interest rates on four occasions to strengthen the ruble and tackle inflation. On October 13, Russian President Vladimir Putin signed a decree that forced 43 companies in the country to sell some of their dollars and euros in Russia. The ruble is currently hovering at between 91 and 92 per US dollar.

Some of the international companies that wound down their operations in Russia or have exited the country since the invasion of Ukraine include McDonald’s, BP, Carlsberg, Shell, and Starbucks. While the Danish brewer giant announced in June it found a buyer for its Baltika Russian subsidiary, Putin ordered authorities to confiscate the stake.

Carlsberg Chief Executive Jacob Aarup-Andersen said that the company won’t enter any agreement with the Kremlin that could make the assets’ seizure look “legitimate.”