The BRICS countries want to get rid of the influence of the American dollar. The stakes are high for this group of countries, particularly for Russia, which is undergoing a battery of financial measures taken by the West in response to the invasion of Ukraine. It seems that the country is maneuvering to get rid of these sanctions. And it is probably getting there since the ruble, the Russian currency, has surpassed the dollar on the foreign exchange market.
Victory of an influential BRICS member on the foreign exchange market
New interesting development around the battle that the BRICS are waging against the United States on the financial level. One of the members of the alliance, Russia in this case, won a strategic monetary victory against Uncle Sam’s country.
In the last news, the American currency, the dollar, was overtaken by the Russian ruble on the foreign exchange market. The event is not insignificant when we know that Russia has been subject to Western sanctions for more than a year in connection with its invasion of Ukraine.
Thus, despite the sanctions imposed on Russia, the Russian ruble triumphs on the foreign exchange markets. A victory linked to the recent downward movements in the exchange rate of the American dollar. Just a month ago, the latter was exchanged for 100.30 rubles.
Now one American dollar is exchanged for 91.94 Russian rubles. This is a substantial fall estimated at 8.36 points for the dollar. This, in just one month. This development makes sense for BRICS member Russia. It means that despite the sanctions taken supposedly to stifle the Russian economy, the latter is resisting effectively. Which demonstrates the relevance of Russia’s economic strategy.
How does Russia manage to make its currency resist sanctions?
This is obviously the question that every analyst legitimately asks themselves. The answer is that the BRICS country, led by Vladimir Putin, deployed a tactic to skillfully circumvent the sanctions.
Indeed, to make the Russian ruble a competitor to the American dollar, Russia has engaged in a vast campaign of buying and selling its local currencies on the foreign exchange market. This approach involved in addition to the ruble, the yuan, the currency of China, another influential member of the BRICS.
Specifically, the Central Bank of Russia has launched significant purchase and sale transactions on the domestic market. The institution thus executed approximately 0.8 billion rubles worth of tenders on the Moscow Stock Exchange. That’s the equivalent of $8.7 million.
The strategy proved instrumental in guiding the trajectory of the ruble. Because this initiative marked the beginning of Russia’s efforts to control the performance of its currency in the face of external pressures. This above all reveals the resolute commitment of the BRICS countries to implement their monetary empowerment plan which, according to recent information, would make room for digital payment methods. A prospect which should ultimately involve cryptos.
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