By the World’s Best Investment Manager, Financial Market’s Journalist
In Russia, a new rule emerges: Avoid mentioning the war when discussing the rouble. The 9% fall of the rouble against the U.S. dollar is not directly linked to Ukraine’s surprise attack on the Kursk region, according to Russian media and analysts in state-controlled banks.
The rouble’s decline began on Aug. 6, coinciding with the first day of the attack – the largest by a foreign power on Russian soil since World War Two. Currency traders, speaking anonymously to Reuters, revealed that foreign banks were the primary sellers of the Russian currency.
State banks attribute the fall to economic factors, with analysts at Sberbank pointing to U.S. sanctions and reduced currency sales by exporters. The Russian central bank and government have remained silent on the issue.
Despite reports on the rouble’s decline, the Kursk attack has not been directly linked to it in Russian media and state television. This reluctance to connect the two events reflects Russia’s efforts to shield its economy from negative news and portray it as resilient in the face of Western sanctions.
As the rouble shows signs of recovery, some analysts dismiss any correlation with the attack, while others predict stabilization. Economist Mikhail Belyaev believes linking the currency decline to the Kursk incursion is unfounded.
Analysis: The rouble’s fall is influenced by a complex interplay of geopolitical events, economic factors, and market dynamics. Understanding these connections can help individuals make informed decisions about their investments and financial security in an uncertain global landscape.