The ruble strengthened this week to levels not seen since 2018, making the currency the second-best performer against the dollar this year. Russia has taken steps to weaken the currency, with the central bank lowering interest rates again.
Normally, currencies follow economies up or down. In Russia’s case, government efforts that limited selling and forced buying pushed it higher, so high in fact that it has started to weigh on the economy.
“I wouldn’t have anticipated this,” said Jane Foley, head of foreign-exchange strategy at Rabobank. “But when you put in the capital controls, you’re not looking at something real.”