Economics

What is the Currency of Russia?

The official currency of Russia is the Russian ruble.

The legal tender of Russia is called the Russian ruble. The ISO code of the currency is RUB, and 1 ruble is made up of 100 kopeks. The Bank of Russia is the issuer of the currency. Ruble banknotes are printed by a Joint Stock Company called Goznak while ruble coins are minted by Saint Petersburg Mint and Moscow Mint, both of which are also part of Goznak.

History of the Ruble

The use of the ruble in Russia and its territories started in the 13th century. It was used in the Russian Empire and Soviet Union under the name soviet ruble and it was denoted as SUR. In 1704, it was the first currency in the world to adopt a decimal system, when 1 ruble was subdivided into 100 kopeks. The Soviet ruble ceased to be Russia currency in 1992 after the Soviet Union broke up in 1991. The first Russian ruble replaced the Soviet Ruble in the ratio of 1:1. The first Russian ruble was denoted as RUR. Russia was faced with a financial crisis in 1998, and during this period the Russian ruble was devalued. A new ruble was introduced in the country and the new ISO Code assigned to the currency was RUB. The current rubble replaced the old ruble in the ratio of 1 RUB to 1000 RUR.

Trading the Ruble

Of all world currencies, the Russian ruble is ranked the 17th most traded currency in the foreign exchange market. In the country, it is illegal to use foreign currency in transactions between its residents. The crime attracts a fine of between 75% and 100% of the transaction’s worth. There are few exceptions however. Currently the ruble trades against the US dollar at the rate of 59.9696 RUB to 1 USD. Russia’s president in 2014 advised the country’s Central Bank to put in place measures that would regulate the exchange rate of the ruble and pointed out that a freer ruble would greatly benefit the economy of the country.

International Trade

In 2010, President Putin of Russia and China’s Premier Wen Jiabao got into a treaty where the two nations decided that they would employ their national currencies in trading between themselves, and not the US dollar. Following the agreement, both countries incorporated each other’s currencies in their respective domestic foreign exchange markets. The move was meant to strengthen Russia and China’s economies in the Great Recession as well as foster stronger ties between the two nations.

Inflation

The value of the Russian ruble slumped in 2014 leading to a financial crisis in the country that lasted until 2016. This was caused by a drop in the price of oil globally, a major export of the country and economic sanctions that were imposed on the country due to its political policies. Investors lost confidence in the country’s economy, and most of them sold off the assets they had bought in the country. The economy has since recovered and as of June 2017, the inflation rate in the country was 4.4%.

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