The Ruble Drops Over 18% in 2023, But Economists Believe It Has ‘Stabilized’

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As the Russian ruble reached a year’s low against the dollar, trading close to 92 rubles for one US dollar, Economist Robin Brooks asserts that the ruble is now stable and has the potential to be invigorated by surging oil prices. Brooks, an economist at the Institute of International Finance (IIF), suggested that G7 nations contemplate lowering the Russian oil price ceiling from $60 to $50.

Ruble’s Value Decreased More Than 18% in 2023

Robin Brooks, IIF’s chief economist, stated that the ruble appears to have “stabilized” and could be energized by climbing oil prices in the future. As a former chief forex strategist at Goldman Sachs, Brooks noted on Twitter that despite Russia’s current deficit in June, the ruble could see a boost if G7 nations fail to decrease the oil price cap from $60 to $50 per barrel.

At the time of this report (July 24, 15.30 EST), one US dollar could buy just over 90 rubles, a stark contrast to the roughly 73 rubles that could purchase one dollar at the beginning of 2023. This indicates a depreciation of the ruble by slightly more than 18% since the year’s start. Johns Hopkins Economics Professor Steve Hanke asserted that the ruble’s plummeting value is leading to spiraling inflation in Russia, which he estimates to be at 50% per annum.

In addition, Brooks’ tweet on July 22 is his latest call for Western nations to further limit Russia’s capacity to counteract sanctions effects through heightened oil revenues. As reported by CryptokenTop.com News, the ruble was once the world’s best-performing currency in 2022, a phenomenon some experts attributed to a surge in energy prices.

Russian Oil Firms Overcome Sanctions

Nevertheless, following the conclusion of winter, the demand for oil and gas dropped, and the price of Urals crude—Russia’s primary oil grade—fell from over $100 per barrel in 2022 to below $60 for a significant part of 2023. Many Western observers attribute this price drop to the imposed price cap. Brooks and others have proposed further lowering this cap, but G7 nations have not yet heeded these suggestions.

Following Russia’s invasion of Ukraine, Brooks pointed out in an earlier tweet that China’s exports to Georgia, Belarus, Kazakhstan, and Turkey have skyrocketed. He argues that the solution is not to tighten export controls on goods potentially bound for Russia but to lower the G7 cap to restrict Putin’s cash reserves.

A Wall Street Journal report dated July 22 hinted that the G7’s price cap’s efficacy might be waning, as Urals crude prices exceeded $60 in April. The report cites increased demand for Urals crude from countries like India and China, along with oil output cuts by OPEC nations, as key reasons for Russian oil producers selling at prices above the cap.

However, Western officials, including the United States Deputy Treasury Secretary Wally Adeyemo, maintain that the price cap is still effective.

According to Adeyemo, “The price cap fundamentally curbs Russia’s revenue considerably while still ensuring global markets are supplied with Russian oil.”

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More about Russian Ruble Depreciation

• Russian Ruble Depreciation
• Oil Price Cap by G7 Nations
• Robin Brooks on Ruble Stabilization
• Urals Crude Price Fluctuation
• G7’s Price Cap Effectiveness