The Russian ruble has declined to a 17-month low as economic sanctions imposed over the invasion of Ukraine continue to impact the country’s currency.
The ruble has lost about 30% of its value against the U.S. dollar this year.
Russia’s central bank blamed the country’s shrinking balance of trade for the decline as the country’s current account surplus has fallen 85% year-over-year since January.
The Bank of Russia has halted all foreign currency purchases for the rest of the year in a bid to shore up the currency, which is fueling fears of rising inflation as Russia attempts to transform its economy in the face of increasing isolation and punishing sanctions.
Russia’s gross domestic product (GDP) exceeded expectations and grew 4.9% year-over-year in the second quarter. That was a recovery from a 1.8% contraction in this year’s first quarter.
Russian President Vladimir Putin continues to insist on state-controlled media that the economic sanctions imposed on Russia since its invasion of Ukraine more than a year ago are not having any impact on the country’s economy.
