INSUBCONTINENT EXCLUSIVE:
After a historic collapse in the wake of Russia's military offensive in Ukraine, the ruble has staged a spectacular bounceback, supported by
of the Russian economy.The Feb
24 military operation triggered unprecedented Western sanctions on Moscow, sending the ruble into free-fall and accelerating already high
to financial stability had "ceased to increase" for now."It's clear that the Central Bank of Russia assesses that Russia's economy is now
emerging from the most acute phase of its crisis and that such restrictive monetary conditions are no longer warranted," said Liam Peach,
emerging Europe economist at Capital Economics.The ruble's return to levels last seen before the start of Moscow's military campaign is a
sanctions, partly because of uncertainty and logistical disruptions," she told AFP."But exports are solid, and with commodity prices high we
expect a historically high account surplus of $20-25 billion in March."Oil and gas, Russia's main exports, keep flowing abroad, filling
have largely spared key Russian exports."It only affects 5% of Russian exports, so it's not that much," said Donets.Robust exports have been
supplemented by harsh capital controls introduced by the central bank.The West froze some $300 billion of Russia's foreign currency reserves
abroad, a move that Foreign Minister Sergei Lavrov has described as "theft."To counter the sanctions, exporting companies were forced to
ruble recovery does not equal a strong economy, however, analysts said."Russian equities and the ruble currently remain decoupled from
Russia, which has relied heavily on imports of manufacturing equipment and consumer goods, to plunge into a deep recession.Russia's
inflation rate reached 16.7% year-on-year in March, the state statistics agency said on Friday, a level not seen since 2015, while food
was "the highest monthly increase since the 1990s."Renaissance Capital analysts predict that annual inflation will peak at 24% this
summer.Donets said that "the market is destroyed in a sense.""We have a closed financial system now," she added."Where would the ruble rate
be if there were no capital controls? It's very hard to say, there has been no precedent."
