The Russian ruble has fallen to its lowest level on the international currency market since the first weeks of the country’s full-scale invasion of Ukraine, with 1 US dollar costing over 110 rubles on Wednesday afternoon, while 1 euro cost over 115.
The ruble’s decline comes after the US Treasury Department imposed new sanctions on Thursday targeting Russia’s Gazprombank, which plays a crucial role in administering payments for Russian gas exports to Europe.
Until now, Gazprombank, Russia’s third-largest by assets, had been spared from US sanctions to allow European countries to continue paying for Russian gas supplies.
The US sanctions package also targeted over 50 other Russian banks as well as Russian financial officials as part of a renewed effort to cut the country off from the international financial system to prevent it from paying for the technology and equipment it requires to continue the war in Ukraine.
The ruble has been gradually falling since the summer, though many economists did not expect it to break the 100 ruble to the dollar rate that has long been considered an important psychological benchmark for both Russian consumers and the government.
Economists also attribute the sharp fall of the Russian currency to the strengthening of the American dollar following Donald Trump’s victory in the US presidential election and after Ukraine launched the first US-supplied ATACMS missiles at Russian territory earlier this month, to which Russia responded by firing its Oreshnik medium-range ballistic missile for the first time on the central Ukrainian city of Dnipro.
Although a weaker ruble is likely to reduce Russians’ purchasing power by driving up the cost of imported goods, the country’s Finance Minister Anton Siluanov took a more positive view of the situation on Tuesday, saying the ruble’s devaluation was “very, very favorable” to Russian exporters.
