Dollar vs. Ruble: Russia's currency is world's top performer in 2022

Phil Rosen
Yahoo! NewsBusiness Insider
Wed, 11 May 2022 20:36 UTC

© Contributor/Getty Images

Russian President Vladimir Putin.

The Russian ruble has turned into the world's best-performing currency this year, as its onshore rate is up more than 11% against the US dollar so far in 2022.

The ruble is the biggest gainer among 31 major currencies, according to data tracked by Bloomberg, and has overtaken the Brazilian real, which is up 9% this year.

But the ruble's advance has come after Moscow imposed a slate of capital controls to prop up the economy to offset Western sanctions for its war on Ukraine. That means few investors are able to take profits from the currency rally out of Russia.

Comment: A responsible move by the Kremlin, which prevents wild currency market swings. Financial stability for the Russian people is very important to Putin's overall goals for Russia.

The capital controls are in addition to Russia demanding ruble-payments for natural gas supplies from European nations, as well as forcing exporters to sell foreign-exchange holdings.

Nonetheless, the success of the Kremlin's artificial market maneuvers has outperformed those of other nations like Argentina and Turkey when they attempted similar measures.

But currency traders are about to stop using the onshore exchange rate for some transactions as the strict capital controls have produced a bigger spread compared to the offshore ruble rate.

Starting on June 6, the Trade Association for the Emerging Markets has recommended that traders use the rate from WM/Refinitiv to settle some derivative contracts, according to an April 20 statement that was reported by Bloomberg.

Comment: Meanwhile, agriculturally, Russia goes from strength to strength. Is the 'mandate of heaven' shifting away from the West?

Russia is expecting a bumper crop this year, including a record wheat harvest, Russian President Vladimir Putin said on Thursday, citing preliminary data.

"A good harvest is expected this year. According to experts - of course, these are preliminary estimates - grain harvest can reach 130 million tons, including 87 million tons of wheat," Putin said, noting that "this can become a record [wheat harvest] in the entire history of Russia."

According to the Russian president, such a result "will allow not only to meet domestic needs with a margin, but also to increase supplies to the global market for our partners, which is very important for the world food markets."

Putin added that a number of countries are facing the threat of famine, pointing out that the blame for that lies entirely on "the Western elites."

Russia's largest grain harvest was recorded in 2017, which came in at 135.5 million tons, including 86 million tons of wheat.

In 2020, the figure was 133.5 million tons of grain (including 85.9 million tons of wheat). Last year, the harvest stood at 121.4 million tons (with 76 million tons of wheat).

Russia is projected to retain its leadership in the world's wheat market in the coming years.

Thanks to sanctions Russia will be self-sufficient within a decade - Agricultural Minister

Ice Age Farmer called it years ago:

• Ice Age Farmer Report: End of cheap food 2019 - Meat rationing and free beer
• Adapt 2030 Ice Age Report: Food strangeness happening around the world
• Psychopathic corporations and wealthy elites now control more than 75 percent of the world's farmland
• Ice Age Farmer Report: America's Top Owner of Farmland: Bill Gates -- In Control of Food
• A catalogue of crop failures
• Agriculture Secretary warns of food crisis before being removed