The Russian currency has staged a remarkable comeback after ta | USSR 2.0

The Russian currency has staged a remarkable comeback after taking a massive beating due to Western sanctions on Moscow.

A part of the recovery can be explained by a stronger financial position that Russia finds itself in thanks to a steep rise in revenues from oil and gas exports and a sharp drop in imports. Bloomberg Economics expects Russia will earn nearly $321 billion (€292 billion) from energy exports in 2022, up more than a third from last year, if its major customers, including the European Union, continue buying Russian oil and gas.

Experts say the rest of the rebound is a result of the ruble being artificially propped up by the Russian central bank through capital controls.

The currency moves don't represent the fundamentals of Russia. More often than not, you see the fundamentals reflected in the currency. But as soon as capital controls are put in place, then that obscures the picture.

The Russian economy, which the IMF in January forecast would grow 2.8% this year, is now predicted to shrink 10%-15%. Despite the recent upswing, the ruble's outlook appears less rosy in the longer term.

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