It has been more than a month since the Battle of Ukraine and Russia began. There doesn’t seem to be any hope of the end of this fight. The talks between the two countries so far have been fruitless. Meanwhile, Russia’s economy is being affected a lot. The reason for this is the sanctions of American and European countries on Russia. Russia’s exports are almost at a standstill except for oil and gas. This has a direct impact on the Russian currency, the ruble. There has been a big decline in this. To save it from falling further, Russian President Vladimir Putin has made a big bet.
Putin has said that European countries will have to pay the price of gas and oil only in rubles. Until now, European countries have been paying for gas and oil imported from Russia in dollars or euros. European countries import 40 percent of their gas from Russia. They are heavily dependent on Russia in terms of fuel. Putin knows this weakness of his. That is why he had taken this decision on 23 March itself.
Crude and gas prices rose after Putin’s decision. However, European countries have refused to accept this decision of Russia. German Foreign Minister Christian Lindner has said that European countries will not succumb to any blackmailing by Russia. He has also said that in the agreement to buy gas and fuel from Russia, it has been said to take payment in dollars and euros.
The ruble has been depreciating against the dollar since the beginning of this year. In January the price of 1 dollar was 75 rubles. Before Russia’s attack on Ukraine, the ruble had fallen to 85. The ruble saw a sharp fall after the attack on Ukraine began on 24 February. In two weeks, its price had fallen to 145 against a dollar. However, now there has been some recovery from it.
The biggest reason for the fall in the ruble is the sanctions imposed on Russia. America, European countries and Japan have imposed many types of sanctions on Russia. Due to this exports from Russia to these countries have come to a standstill. At present, oil and gas have been kept out of the purview of this ban. Russia exports defense equipment by taking luxury goods. Apart from this, the US, UK, Europe and Canada have banned Russian flights.
After the ban on the use of SWIFT, international transactions of Russian banks are also banned. This has a direct impact on the ruble. The demand for the ruble has dropped drastically. Due to this its value is falling. Russia does not want the value of the ruble to fall below the current level. Keeping this purpose in mind, he has implemented a new rule. For the time being, there has been a slight recovery in the ruble from this rule.
There has been a slight recovery in the ruble due to Russia’s decision to accept payments in rubles. The ruble has come down to 85 against a dollar. It is well below the low of 145. The reason for this is that European countries cannot suddenly stop importing energy from Russia. Doing so will have a bad effect on the economy of those countries. Along with this, the life of the common people of these countries will also be in trouble.
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