USD/RUB climbs above 111.00 as Russian economy melts down on sanctions from West

• USD/RUB has surpassed the psychological level of 100.00 swiftly on meltdown in the Russian economy.
• The firmer negative undertone in Russia will keep the mighty greenback stronger.
• The collapse of Russia’s SWIFT international banking system has restricted their oil exports.

The USD/RUB has surpassed the psychological mark of 100.00 in no time as the Russian economy started melting down after the sanctions by the Western leaders.

In response to Russia’s invasion of Ukraine, the Western leaders imposed sanctions on Russia in which its SWIFT international banking system collapsed, passing on multiplier effects on the domestic economy. The exports of oil and energy paused.

Kremlin got restricted from technology imports. Russian citizens started liquidating their deposits from banks and financial institutions. Adding to that, British Petroleum (BP) announced an exit from Russian oil and gas investments. It is worth noting that BP is the largest foreign investor in Russia.

The restrictions on Russia’s oil exports have impacted Europe and other oil importers too but the carnage on the Russian economy has no match at all.

Should the Russian military attacks on Ukraine intensify, the economy will face more downside risks.

Meanwhile, US Senator from Connecticut Chris Murphy said that “Russians have fallen behind their timeline”. The Ukraine forces are resisting Moscow strongly and Russian equipment and logistics are witnessing multiple failures.

The US dollar index (DXY) is struggling to move upside but is trying hard to build ground near 96.85. The DXY is likely to dance on the tunes of Wednesday’s testimony from the Federal Reserve (Fed) chair Jerome Powell. Apart from Powell’s testimony, the DXY will respect the US Manufacturing Purchasing Managers Index (PMI) data by the Institute for Supply Management (ISM), which is due on Tuesday.