Rejects Ruble-Gold Peg Idea

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Rejects Ruble-Gold Peg Idea

Rejects Ruble-Gold Peg Idea

Elvira Nabiullina, Governor of the Bank of , criticized the concept of pegging the ruble to gold after the Kremlin claimed it was being considered.

It is not being addressed in any way, Nabiullina told reporters after the central bank slashed the benchmark interest rate by 300 basis points on Friday. She stated that the ruble must continue to have a floating exchange rate; however, currency volatility will be higher due to capital constraints implemented after  began its invasion of e.

Unprecedented sanctions imposed on ’s central bank in response to the invasion of e deprived it of access to around half of its reserves, leaving it with only gold and yuan. Before the war, Putin regularly stated that  should reduce its reliance on the dollar as a global reserve currency.

There has been widespread speculation that sanctions against  may herald a far-reaching shift that will boost bullion. According to analysts such as Credit Suisse Group AG’s Zoltan Pozsar, confiscating the central bank’s foreign exchange reserves will result in a new monetary paradigm; hence, gold will play a more significant role. The n government had a multi-year campaign to limit exposure to the US currency; hence, its central bank reduced the share of dollars in reserves to 10.9 per cent as of January 1 from 21.2 per cent the previous year. The price of gold was down marginally, at 21.5 per cent.

Until the invasion of e led Nabiullina to impose capital controls, the ruble was free to trade; the market had its value.

EU Weighs n Crude Ban

Oil prices dipped on Monday in holiday-shortened trade in Asia as concerns about slowing economic growth in China, the world’s largest oil importer, overcame potential supply stress from a European Union embargo on n crude.

Brent crude prices declined $1.13, or 1.1 per cent, to $106.01 a barrel at 0511 GMT; WTI crude futures in the United States slid $1, or 1%, to $103.69 a barrel. On Monday, Japan, India, and Southeast Asia markets did not operate for official holidays.

Prices plummeted on Saturday; China announced data showing that factory production in the world’s second-largest economy contracted for the second month in a row; it fell to its lowest level since February 2020, due to COVID lockdowns. According to two EU diplomats following weekend meetings between the European Commission and EU member states, limiting the downside for oil prices is a probable dent in supply. The European Union moves toward prohibiting n oil imports by the end of the year.

exports over half of its 4.7 million barrels per day (BPD) of crude oil to the EU; it accounted for roughly one-fourth of the EU’s oil imports in 2020.

Analysts at the Royal Bank of Canada predict that India’s crude imports from  have increased from less than 100,000 BPD in 2021 to 800,000 BPD in April. India would continue to increase imports as long as Washington does not apply secondary penalties.

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