The current fluctuations of the dollar and euro have caused many economic analysts in Russia to evaluate where the Russian ruble blends into the currency mix. In 2009, the devaluation of the dollar-euro caused a decline in the value of the ruble. In the past six months, however, Russian economists believe that positive changes in the country’s economic markets may create a more stable national currency. The goal of several of Russia’s leaders including the Finance Minister, Alexei Kudrin is to encourage more transactions directly with the ruble rather than the dollar-euro.
According to a recent report published with the RIA (Russian Information Agency) Novosti, Kudrin recommended that CIS countries request direct currency quotations for business dealings in specific ruble amounts. By not referring to the dollar-euro, he believes that the ruble may gain strength. Some independent analysts disagree and have voiced concerns about the volatility of the ruble under current conditions.
How the Dollar and Euro Affects Russian Currency
Other Russian leaders including Putin and Medvedev have recently commented on the state of the dollar-euro. Although they believe that the euro will remain strong in the global market, they also have raised concerns about Russia’s susceptibility to devaluation. Trade between Russia and the EU creates an underlying tie with the ruble to the euro that is difficult to separate. Political leaders in Russia are attempting to control the situation by encouraging citizens to trust in the ruble and use it whenever possible rather than the dollar or euro.
As Russia’s push toward modernization continues, international investors may play a larger role in helping with new building projects. Those investors will offer funds in either dollar or euro currencies and the banks that accept the monies will be required to convert them to rubles or leave them intact. Russian investment bankers are left with this daunting choice, giving them a possible advantage depending on Russia’s ability to manage their assets. Russia also stands a good chance of positive cash flow if higher demand for natural resources continues. If the ruble can remain less tied to the dollar-euro, the Russian economy may take positive strides.
Global Economists Views on the Dollar-Euro
Global economists can only guess about the exact future of the dollar and euro performance but they all agree that the two currencies will continue to be closely tied. Other countries including Russia will naturally measure their own currency in regard to the two major players. What many countries including Brazil, India, Russia and China are attempting, however, is to create their own identity in the growing foreign market. By encouraging their citizens to use the native currency, they stand a chance of gaining strength against the powerful dollar-euro relationship.