Rushing to sell USD and Euro, Russia moves towards currencies of "friendly countries"

In its recently published monthly financial risk assessment, the Russian Central Bank said that the ruble's fall in exchange rates against major currencies has prompted many Russians to sell off their holdings in dollars and euros.

Russians sell off holdings in dollars and euros. (Source: biz.crast.net)

According to the Central Bank of Russia, after the ruble fell to 90 rubles per dollar in early July, people began selling foreign currency worth $450 million, mainly in the first half of July.

The bank said pressure on the ruble continued to be created by a decline in the foreign trade balance and less foreign currency earnings for exporters. However, the bank noted that the decline in the local currency in July was insignificant compared to the 10.4% decline at the end of June.

The ruble has weakened against Western currencies for months.

Russian Finance Minister Anton Siluanov attributed the trend to changes in Moscow's trade balance amid pressure from Western sanctions and demand for hard currency in the summer.

At the beginning of June, the dollar was valued at around 80-81 rubles and by July it was around 89 rubles to the dollar. The exchange rate peaked on July 6, when for the first time since March 2022, 1 dollar was worth 93 rubles.

The above trend continued in August and by August 9, 98 Rubles were exchanged for 1 USD.

The Russian Central Bank said the country's currency trading market continues to "turn away" from the US dollar and the euro in favor of currencies of "friendly countries" or those that have not imposed sanctions on Russia over its military campaign in Ukraine.

For example, the share of the yuan in the market increased from 39.8% in June to 44.0% in July – a new record high for Russia.

In addition, the share of the Euro and the USD decreased from 58.8% in June to 54.4% in July.

Source: https://baoquocte.vn/ao-at-ban-usd-va-euro-nga-huong-toi-dong-tien-cua-cac-quoc-gia-than-thien-238281.html