Part 3/8:
- Active Foreign Currency Management: The most critical factor is Russia's deliberate action in managing its foreign reserves. The country earns a significant portion of its revenue from oil exports, which are priced in USD and increasingly in Chinese yuan. Normally, these foreign currencies would sit idle, but Russia has been actively selling these dollars and yuan to buy rubles, artificially supporting and inflating the ruble’s value.
The Hidden Cost of a Strong Ruble
While a strong ruble may seem beneficial, the reality reveals several downsides: