Russian Rouble Posts Multi-Year Highs Against Dollar, Euro as More EU Countries Agree to Pay for Oil in Euro

The Russian rouble has kept rising against the US dollar and euro after it posted on Friday its strongest levels against the euro and dollar in seven and four years, respectively.

On Monday, the Russian currency strengthened further, boosted primarily by capital controls and the positive sentiment in the wake of news that more European Union nations were prepared to pay for oil in the Russian currency.

Rouble Gains 30 Percent Against Dollar This year

In early morning trade, rouble rose 2.5 percent against the dollar at 58.74. It had hit 57.0750 last Friday, the strongest level since late March 2018. Against the euro, the Russian currency gained 2.3 percent, hitting 61.38, close to, the strongest point since June 2015.

Russian Rouble
Russian Rouble Pixabay

So far this year, the rouble has gained nearly 30 percent against the dollar, despite the tough Western sanctions against Russia in the wake of the Ukraine war.

The Russian rouble had sunk to an all-time low of 139 against the greenback on March 7, in the immediate aftermath of the Western sanctions.

Sanctions Fail to Curb Rouble

However, a month after the debacle, rouble had found its mooring, suggesting that the sanctions did not actually succeed in blocking significant foreign currency inflows into Russia.

Euro has fallen after German factory orders Reuters

Despite the sanctions, many European countries went ahead and bought Russian gas, helping Moscow garner critical inflows of dollars and euros while battling the sanctions. This was possible because the European buyers were not able to find immediate replacement for Russian energy.

However, a series of crucial steps taken by Kremlin also played a significant part in shoring up rouble against all odds. Here's a look at some of those factors.