BOFIT Viikkokatsaus / BOFIT Weekly Review 2015/45
Ruble-dollar exchange rate and price of Urals crude oil
Source: Reuters
The first step towards liberalisation of ruble’s exchange rate was taken 25 years ago. Starting from November 1, 199o, the commercial ruble exchange rate was set to 1.8 rubles to the dollar by president Mikhail Gorbachev’s decree. The commercial rate (more favourable than the official exchange rate) was used in converting corporate forex income to rubles. Thereafter, the ruble’s exchange rate was gradually liberalised. In November 2014, the CBR announced it would no longer steer the ruble’s external rate.
The ruble’s use in Russia’s international payments has gradually increased. In the first half of this year, over 10 % of Russian exports and nearly 30 % of Russian imports were settled in rubles. The ruble is mainly used in trade between Russia and CIS countries, but a rather large share of Russian imports from the EU are also settled in rubles. In addition, about a fifth of Russian foreign debt is in rubles.
The ruble’s use in overall international payments remains marginal and has decreased recently. SWIFT, the provider of global financial communication services, reports that the ruble’s share of all international payments this year has been just 0.2 %, making it less popular than e.g. the Turkish lira or the South African rand.