sharp weakening of the ruble
In the last year, the Russian Federation has seen a massive outflow of capital from Western companies. After the interventions of the central bank, it was possible to stabilize the situation, but only for some time. Despite this, the Russian ruble has weakened sharply against other currencies over the past week. Back in the summer, Russians had to pay 50 rubles for one US dollar, last month it was already 75 rubles, and today they have to pay up to 82 rubles for one dollar. A weakening ruble means investors are concerned about falling revenues from oil and gas sales and Russia’s fragile economy.
The immediate cause of the collapse of the Russian currency was the sale of a huge oil field in Far Eastern Sakhalin by the British-Dutch oil company Shell. It already got rid of its assets in the country last year, now only the final steps are being completed and finalized. Similar to Shell, other Western companies are having trouble exiting Russia. The local authorities make the situation difficult for them and block their departure. According to The Wall Street Journal, Russia could face a massive outflow of capital in the coming months. Vladimir Putin is to sign decrees that will allow Western companies to finally leave their long-depreciated Russian positions.
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