Weak Rouble Fuels Russian Exports Amid Sanctions

Russia's weak rouble is aiding exporting companies by counteracting the negatives of high benchmark interest rates. This devaluation comes amid rising tensions with the West over the Ukraine conflict. Finance Minister Anton Siluanov acknowledges the current exchange rate as favorable for exporters despite ongoing Western sanctions.

Russia's depreciating rouble, driven by escalating tensions with the West, is proving advantageous for the country's exporters. This devaluation is effectively offsetting the burden of high benchmark interest rates set by the central bank, noted Finance Minister Anton Siluanov on Tuesday.

The rouble plummeted to its lowest value against the U.S. dollar and the Chinese yuan since March 2022. The currency's drop follows a new wave of Western sanctions targeting Russia's financial sector, linked to the ongoing conflict in Ukraine.

Siluanov, speaking at a financial conference in Moscow, highlighted the benefits of the weak rouble for exporters, acknowledging for the first time that Russian authorities do not oppose the currency's current weakness. He emphasized that the exchange rate plays a more crucial role for exports than the interest rate.

(With inputs from agencies.)