The Russian Ruble is now up more than any other currency in the world for 2022.
This was most assuredly not what sanctions were supposed to accomplish:
Capital controls imposed by Russia have turned the ruble into the world’s best performing currency this year, though not many people can pocket a profit on the rally.
The ruble resumed its advance against the dollar on Wednesday as the Moscow Exchange reopened after two days of public holiday. It’s now up more than 11% against the US dollar since the start of the year, surpassing the real’s 9% advance to become the top gainer among 31 major currencies tracked by Bloomberg. The offshore rate is up even more, about 12%.
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Still, the irony of the ruble performing so well while at war is remarkable, especially as other countries that imposed capital controls in the recent past have not achieved the same results. Turkey and Argentina tried similar measures when they faced a horde of sellers in the past few years with disastrous consequences for the lira and the peso, which reached fresh all-time lows and never recovered.
There is nothing ironic about this. Unlike the Turks and the Argentines, who encountered unexpected speculative attacks on their currencies, the Russians have spent years gaming the effects of severe Western sanctions, and came up with ways of countering these actions.
Their bankers are better trained than their soldiers.
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